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Does Land Rent between Acquaintances Deviate from the Reference Point? Evidence from Rural China

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  • Tongwei Qiu
  • Biliang Luo
  • Qinying He

Abstract

This paper theoretically and empirically investigates whether acquaintance networks influence the deviation of land rent from the reference point advanced by Hart and Moore. The coefficient of variance and the range of land rent are used to represent the degree of deviation from the reference point. Based on village‐level data from the 2015 China Household Finance Survey, the estimated results indicate that land rent between acquaintances is more likely to significantly deviate from the reference point. Although rental transactions are conducted between acquaintances, larger deviations from the reference are also associated with a longer time to close deals. Our analysis using household‐level data further supports our findings, indicating that land rental markets embedded in the acquaintance networks of rural China are in a transition period and have characteristics of both relational and market orientation. The policy makers should introduce more outer village lessees or other market ingredients to increase the voluntary marketization of land rentals inside acquaintance networks.

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  • Tongwei Qiu & Biliang Luo & Qinying He, 2020. "Does Land Rent between Acquaintances Deviate from the Reference Point? Evidence from Rural China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 28(3), pages 29-50, May.
    • Handle: RePEc:bla:chinae:v:28:y:2020:i:3:p:29-50
    DOI: 10.1111/cwe.12331
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    2. Yang Guo & Meiling Cui & Zhigang Xu, 2023. "Performance Environment, Contract Binding, and the Contract Structure of the Farmland Transfer Market," Land, MDPI, vol. 12(8), pages 1-17, August.
    3. Qiu, Tongwei & Shi, Xinjie & He, Qinying & Luo, Biliang, 2021. "The paradox of developing agricultural mechanization services in China: Supporting or kicking out smallholder farmers?," China Economic Review, Elsevier, vol. 69(C).
    4. Tongwei Qiu & Xinjie Shi & Biliang Luo, 2022. "Formalizing agricultural rentals in China: Does local public action help?," Development Policy Review, Overseas Development Institute, vol. 40(4), July.
    5. Tongwei Qiu & S. T. Boris Choy & Yifei Li & Biliang Luo & Jing Li, 2021. "Farmers' Exit from Land Operation in Rural China: Does the Price of Agricultural Mechanization Services Matter?," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 29(2), pages 99-122, March.
    6. Yinrong Chen & Yanqing Qin & Qingying Zhu, 2023. "Study on the Impact of Social Capital on Agricultural Land Transfer Decision: Based on 1017 Questionnaires in Hubei Province," Land, MDPI, vol. 12(4), pages 1-22, April.
    7. Zheng, Linyi, 2024. "Big hands holding small hands: The role of new agricultural operating entities in farmland abandonment," Food Policy, Elsevier, vol. 123(C).

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