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Property Rights, Land Misallocation and Agricultural Efficiency in China

Author

Listed:
  • A.V. Chari

    (University of Sussex)

  • Elaine Liu

    (University of Houston)

  • Shing-Yi Wang

    (University of Pennsylvania)

  • Yongxiang Wang

    (University of Southern California)

Abstract

This paper examines the impact of a property rights reform in rural China that allowed farmers to lease out their land. We find the reform led to increases in land rental activity in rural households. Consistent with a model of transaction costs in land markets, our results indicate that the formalization of leasing rights resulted in a redistribution of land toward more productive farmers. Consequently, the aggregate productivity of land increased significantly. We also find that the reform increased the responsiveness of land allocation across crops to changes in crop prices.

Suggested Citation

  • A.V. Chari & Elaine Liu & Shing-Yi Wang & Yongxiang Wang, 2017. "Property Rights, Land Misallocation and Agricultural Efficiency in China," Working Papers 2017-091, Human Capital and Economic Opportunity Working Group.
    • Handle: RePEc:hka:wpaper:2017-091
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    More about this item

    Keywords

    China; land reform;

    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

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