Property Rights, Land Misallocation and Agricultural Efficiency in China

59 Pages Posted: 16 Dec 2017

See all articles by A.V Chari

A.V Chari

University of Sussex

Elaine Liu

University of Houston

Shing-Yi B. Wang

University of Pennsylvania - The Wharton School

Yongxiang Wang

University of Southern California - Marshall School of Business

Date Written: December 2017

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

Chari, A.V and Liu, Elaine and Wang, Shing-Yi B. and Wang, Yongxiang, Property Rights, Land Misallocation and Agricultural Efficiency in China (December 2017). NBER Working Paper No. w24099, Available at SSRN: https://ssrn.com/abstract=3087042

A.V Chari (Contact Author)

University of Sussex ( email )

Sussex House
Falmer
Brighton, Sussex BNI 9RH
United Kingdom

Elaine Liu

University of Houston ( email )

4800 Calhoun Road
Houston, TX 77204
United States

Shing-Yi B. Wang

University of Pennsylvania - The Wharton School ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States

Yongxiang Wang

University of Southern California - Marshall School of Business ( email )

701 Exposition Blvd
Los Angeles, CA 90089
United States

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