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Land Tenure Reforms and Land Conservation Investments in China ¨C What Does Real Option Value Theory Tell Us?

Author

Listed:
  • Xianlei Ma

    () (Public Administration College, Nanjing Agricultural University, CHINA)

  • Justus Wesseler

    () (Agricultural and Food Economics, Research Department of Agricultural Economics, Center of Life and Food Sciences Weihenstephan, Technische Universit?t M¨¹nchen, GERMANY)

  • Nico Heerink

    () (Department of Social Sciences, Wageningen University, The Netherlands)

  • Futian Qu

    () (Public Administration College, Nanjing Agricultural University, CHINA)

Abstract

Land conservation investments can make an important contribution to avoidance and mitigation of land degradation. Lack of tenure security and land transferability may, however, limit the extent to which farmers undertake such investments. Using real option value theory, this paper investigates the expected impact of the market-oriented tenure reforms in China since 1998 on land conservation investment incentives. It postulates that the reforms are more likely to elicit land conservation investments in areas where land markets are developing. This paper further argues benefits of the land tenure reforms will be underestimated if only the intrinsic but not the time value of changes in the investment incentives will be considered. The findings obtained from this research provide a better understanding of the relationship between the land tenure reforms and land conservation investments, and are likely to serve sustainable land management in China and elsewhere.

Suggested Citation

  • Xianlei Ma & Justus Wesseler & Nico Heerink & Futian Qu, 2013. "Land Tenure Reforms and Land Conservation Investments in China ¨C What Does Real Option Value Theory Tell Us?," Review of Economics & Finance, Better Advances Press, Canada, vol. 3, pages 19-33, August.
  • Handle: RePEc:bap:journl:130302
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Property rights; Land tenure; Land conservation investment; Real options; China;

    JEL classification:

    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law

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