How does China’s rural collective commercialized land market run? New evidence from 26 pilot areas, China

Rural land marketization has been an essential part of the process of deepening land system reform in China. Since 2015, 33 places in China have been chosen as pilots to build the collective-owned commercialized construction land market (CCCLM). However, little is yet known about how the market is operating and how the price of collective-owned commercialized construction land (CCCL) forms. This study analyzes the price formation mechanism of CCCL by developing a hedonic hierarchical model (HHM) with 4595 CCCL transaction cases from 2015 to 2020, basing on the establishment of a theoretical framework and exploration of the spatiotemporal differences in CCCL prices. The results suggest that the price of CCCL is shaped by the land attributes at the parcel level and the transaction environment at the county level, where transaction environment plays a stronger role in determining CCCL price. At the parcel level, the location, land use type, and land use life span contribute to the formation of the CCCL price. At the county level, the supply and demand relationship and the transaction cost determine the price. Price formation mechanisms of CCCL in western, central and eastern regions are proved to be heterogeneous and the regional differences are affected by the supply and demand relationship at county level. This study highlights the hierarchy of the determinants towards the price of CCCL and fills a gap in the understanding of the price formation mechanism of CCCL, which should help to promote the marketization of rural land and the development of an efficient land price evaluation system in China and in other transition economies worldwide.