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The impact of property rights on households'investment, risk coping, and policy preferences : evidence from China

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  • Deininger, Klaus
  • Songqing Jin

Abstract

Even though it is widely recognized that giving farmers more secure land rights may increase agricultural investment, scholars contend that, in the case of China, such a policy might undermine the function of land as a social safety net and, as a consequence, not be sustainable or command broad support. Data from three provinces, one of which had adopted a policy to increase security of tenure in advance of the others, suggest that greater tenure security, especially if combined with transferability of land, had a positive impact on agricultural investment and, within the time frame considered, led neither to an increase in inequality of land distribution nor a reduction in households'ability to cope with exogenous shocks. Household support for more secure property rights is increased by their access to other insurance mechanisms, suggesting some role of land as a safety net. At the same time, past exposure to this type of land right has a much larger impact quantitatively, suggesting that a large part of the resistance to changed property rights arrangements disappears as household familiarity with such rights increases.

Suggested Citation

  • Deininger, Klaus & Songqing Jin, 2002. "The impact of property rights on households'investment, risk coping, and policy preferences : evidence from China," Policy Research Working Paper Series 2931, The World Bank.
    • Handle: RePEc:wbk:wbrwps:2931
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    References listed on IDEAS

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