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Explanation of the Phenomenon “Different Prices on the Same Land” in the Farmland Transfer Market—Evidence from China’s Farmland Transfer Market

Author

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  • Jia Chen

    (College of Economics and Management, Nanjing Forestry University, Longpan Road, Nanjing 210037, China)

  • Jingwen Xu

    (College of Finance and Economics, Wuxi Institute of Technology, Gaolang Road, Wuxi 214121, China)

  • Hongxiao Zhang

    (College of Economics and Management, Nanjing Forestry University, Longpan Road, Nanjing 210037, China)

Abstract

The purpose of this study was to investigate the differences in farmland rent prices between land transferors and different transferees when considering the quality supervision cost of the transferred farmland. Moreover, the impact of the intervention of township governments, village committees, and other intermediary organizations on the rent price differences is also taken into consideration. The treatment effect model (TEM) and grouping regression model were used. The results showed that: (1) Owing to the different transaction costs, when leasing to village transferees, the land rent was significantly lower than when leasing to non-village transferees. (2) With the intervention of intermediary organizations, such as township governments and village committees, the constraints of the reputation mechanism between acquaintances were weakened, and the cost of information identification when land transferors searched for out-of-town transferees was reduced. As a result, the differences in land rent when transferring to the village and non-village transferees were narrowed. This study presents a different view to explain the transaction characteristics of the rural land transfer market in China. Further, it is of paramount importance to implement an effective public intervention, including strengthening the intermediary role of township governments and village committees, which is conducive to improving the rural land transfer market of most developing countries, including China.

Suggested Citation

  • Jia Chen & Jingwen Xu & Hongxiao Zhang, 2022. "Explanation of the Phenomenon “Different Prices on the Same Land” in the Farmland Transfer Market—Evidence from China’s Farmland Transfer Market," Agriculture, MDPI, vol. 12(12), pages 1-13, December.
    • Handle: RePEc:gam:jagris:v:12:y:2022:i:12:p:2087-:d:993789
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    2. Yinrong Chen & Yanqing Qin & Qingying Zhu, 2023. "Study on the Impact of Social Capital on Agricultural Land Transfer Decision: Based on 1017 Questionnaires in Hubei Province," Land, MDPI, vol. 12(4), pages 1-22, April.

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