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Policy impacts under alternative land market regimes in rural China

  • Kleinwechter, Ulrich
  • Grethe, Harald

In this paper we apply a simulation model of a village economy in Guizhou province, China, to assess impacts of trade reform at the household and the village level under alternative land market regimes. Putting special emphasis on the modeling of household migration a trade reform scenario is simulated with and without the existence of a land rental market in the village. Significant impacts of the land market on the policy outcome regarding household production, income and welfare are found. The possibility to trade land within the village leads to increasing specialization into agriculture and migration among the households as a response to the policy shock. In a situation with a land market, incomes of households which expand agricultural production are less negatively affected by trade reform than incomes of households which migration more. At the village level, a land market does not influence the poverty outcome of the reform but reduces its inequality enhancing impact. Village migration and exports of agricultural outputs increase.

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File URL: http://purl.umn.edu/125860
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Paper provided by International Association of Agricultural Economists in its series 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil with number 125860.

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Date of creation: 2012
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Handle: RePEc:ags:iaae12:125860
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  1. Michael R. Carter & Yang Yao, 2002. "Local versus Global Separability in Agricultural Household Models: The Factor Price Equalization Effect of Land Transfer Rights," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(3), pages 702-715.
  2. Tu, Qin & Heerink, Nico & Xing, Li, 2006. "Factors Affecting the Development of Land Rental Markets in China – A Case Study for Puding County, Guizhou Province," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25547, International Association of Agricultural Economists.
  3. Yang Yao, 2000. "The Development of the Land Lease Market in Rural China," Land Economics, University of Wisconsin Press, vol. 76(2), pages 252-266.
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  7. SHI, Xiaoping & Heerink, Nico & Qu, Futian, 2007. "Choices between different off-farm employment sub-categories: An empirical analysis for Jiangxi Province, China," China Economic Review, Elsevier, vol. 18(4), pages 438-455.
  8. Lopez, Ramon E., 1984. "Estimating labor supply and production decisions of self-employed farm producers," European Economic Review, Elsevier, vol. 24(1), pages 61-82.
  9. Fan, Shenggen & Chan-Kang, Connie & Mukherjee, Anit, 2005. "Rural and urban dynamics and poverty: Evidence from China and India," FCND discussion papers 196, International Food Policy Research Institute (IFPRI).
  10. Deininger, Klaus & Jin, Songqing, 2005. "The potential of land rental markets in the process of economic development: Evidence from China," Journal of Development Economics, Elsevier, vol. 78(1), pages 241-270, October.
  11. Kung, James Kai-sing, 2002. "Off-Farm Labor Markets and the Emergence of Land Rental Markets in Rural China," Journal of Comparative Economics, Elsevier, vol. 30(2), pages 395-414, June.
  12. XING, Li & FAN, Shenggen & LUO, Xiaopeng & ZHang, Xiaobo, 2009. "Community poverty and inequality in western China: A tale of three villages in Guizhou Province," China Economic Review, Elsevier, vol. 20(2), pages 338-349, June.
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