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Tenure security, social relations and contract choice: Endogenous matching in the Chinese land rental market

Author

Listed:
  • Ma, X.
  • Zhou, Y.
  • Heerink, N.
  • Shi, X.
  • Liu, H.

Abstract

In the developing countries rental transactions between partners with close social relations that use informal contracts are still widespread and this may reduce the potential of the land rental market to enhance productivity and equity. Based on household data collected in Jiangxi and Liaoning provinces in China in 2015, this paper examines the relationship between land tenure security, social relations and land rental contract choices, using a nested logit framework. The empirical results show that landlords are more likely to rent out land to tenants who live in the same village, rather than to relatives or strangers, and that insecure land tenure encourages landlords to select informal contracts. Our findings suggest that these decisions (of partner-type and contract-type) are made simultaneously, and that they are made on the basis of a landlord s perceived security of his land rights and the priority he gives to establishing a flexible rental relationship. Key Words: land rental market; contract choice; tenure security, social relations Acknowledgement : Financial support for our research is provided by the National Natural Science Foundation of China (71773054; 71373127; 71503174) and by the Programme Strategic Scientific Alliances of the Royal Netherlands Academy of Arts and Sciences (KNAW) and the Ministry of Science and Technologies of P.R. China (SURE+ project, 2016YFE0103100).

Suggested Citation

  • Ma, X. & Zhou, Y. & Heerink, N. & Shi, X. & Liu, H., 2018. "Tenure security, social relations and contract choice: Endogenous matching in the Chinese land rental market," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277478, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae18:277478
    DOI: 10.22004/ag.econ.277478
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    3. Tang, Liang & Ma, Xianlei & Zhou, Yuepeng & Shi, Xiaoping & Ma, Jia, 2019. "Social relations, public interventions and land rent deviation: Evidence from Jiangsu Province in China," Land Use Policy, Elsevier, vol. 86(C), pages 406-420.
    4. Qian, Chen & Li, Fan & Antonides, Gerrit & Heerink, Nico & Ma, Xianlei & Li, Xiande, 2020. "Effect of personality traits on smallholders’ land renting behavior: Theory and evidence from the North China Plain," China Economic Review, Elsevier, vol. 62(C).

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