IDEAS home Printed from https://ideas.repec.org/a/eee/lauspo/v119y2022ics0264837722001508.html
   My bibliography  Save this article

Heterogeneous choice in WTP and WTA for renting land use rights in rural china: Choice experiments from the field

Author

Listed:
  • Fu, Hong
  • Peng, Yanling
  • Zheng, Linyi
  • Liu, Qi
  • Zhou, Li
  • Zhang, Yuehua
  • Kong, Rong
  • Turvey, Calum G.

Abstract

China's institutional structures regarding land are unique and complex. Recent changes to the land laws now permit farmers to rent Land Use Rights (LUR) from other farmers. The purpose of this paper was to make some determination about the value of certain attributes important in determining the willingness of farmland tenants to pay agricultural rents, and the willingness of owners of land use rights accept a rental price.We use in-the-field discrete choice experiments (DCE) in Shandong, Sichuan, Shaanxi, Jiangsu and Hunan across two waves in 2018 to identify the WTP and WTA attributes for both landlords and tenants. Our underlying hypothesis was that landlords and tenants will likely place different utility weights on attributes of land because their interest between making and receiving a payment are different. This is confirmed in this study. We find little uniformity in WTP and WTA across provinces. Mixed Logit results confirm that not all Chinese farmers think alike and are heterogenous in how they weigh or value attributes. Overall, we find autarky land rental prices of 813.93RMB, 564.65 RMB, 1,193.96 RMB and 863.99 RMB for Shaanxi, Shandong, and Sichuan which are well within the observed range. We observe a fairly wide range of WTP and WTA values across provinces which reflect the individual characteristics of the growing regions surveyed. We also find generally that the WTP for attributes are higher than WTA. These are reflected by utility-rent elasticities which reveals that heWTP is more elastic than WTA. We conjecture that differences in WTP and WTA is attributed to certainty equivalent risk transfers and untethered access by farmers to the wage market.

Suggested Citation

  • Fu, Hong & Peng, Yanling & Zheng, Linyi & Liu, Qi & Zhou, Li & Zhang, Yuehua & Kong, Rong & Turvey, Calum G., 2022. "Heterogeneous choice in WTP and WTA for renting land use rights in rural china: Choice experiments from the field," Land Use Policy, Elsevier, vol. 119(C).
    • Handle: RePEc:eee:lauspo:v:119:y:2022:i:c:s0264837722001508
    DOI: 10.1016/j.landusepol.2022.106123
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0264837722001508
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.landusepol.2022.106123?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Ma, Xianlei & Heerink, Nico & van Ierland, Ekko & Lang, Hairu & Shi, Xiaoping, 2020. "Decisions by Chinese households regarding renting in arable land—The impact of tenure security perceptions and trust," China Economic Review, Elsevier, vol. 60(C).
    2. Su, Yiqing & Araral, Eduardo & Wang, Yahua, 2020. "The effects of farmland use rights trading and labor outmigration on the governance of the irrigation commons: Evidence from China," Land Use Policy, Elsevier, vol. 91(C).
    3. Allen M. Featherstone & Timothy G. Baker, 1988. "Effects of Reduced Price and Income Supports on Farmland Rent and Value," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 10(2), pages 177-189.
    4. Zou, Baoling & Mishra, Ashok K. & Luo, Biliang, 2020. "Grain subsidy, off-farm labor supply and farmland leasing: Evidence from China," China Economic Review, Elsevier, vol. 62(C).
    5. Xin, Liangjie & Li, Xiubin, 2019. "Rental rates of grain land for consolidated plots and their determinants in present-day China," Land Use Policy, Elsevier, vol. 86(C), pages 421-426.
    6. Alfons Weersink & Steve Clark & Calum G. Turvey & Rakhal Sarker, 1999. "The Effect of Agricultural Policy on Farmland Values," Land Economics, University of Wisconsin Press, vol. 75(3), pages 425-439.
    7. Zhang, Jian & Mishra, Ashok K. & Hirsch, Stefan & Li, Xiaoshun, 2020. "Factors affecting farmland rental in rural China: Evidence of capitalization of grain subsidy payments," Land Use Policy, Elsevier, vol. 90(C).
    8. Khantachavana, Sivalai V. & Turvey, Calum G. & Kong, Rong & Xia, Xianli, 2013. "On the transaction values of land use rights in rural China," Journal of Comparative Economics, Elsevier, vol. 41(3), pages 863-878.
    9. Yanling Peng & Rong Kong, 2020. "An analysis of China’s reforms on mortgaging and transacting rural land use rights and entrepreneurial activity," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 80(3), pages 377-400, January.
    10. Zhou, Yang & Li, Xunhuan & Liu, Yansui, 2020. "Rural land system reforms in China: History, issues, measures and prospects," Land Use Policy, Elsevier, vol. 91(C).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hanying Zhang & Jiafen Li & Jinlong Shen & Jianfeng Song, 2022. "Measurement of Supply-and Demand-Side Endowment Effects and Analysis of Their Influencing Factors in Agricultural Land Transfer," Land, MDPI, vol. 11(11), pages 1-21, November.
    2. Yao Luo & Yumei Li & Chen Li & Qun Wu, 2023. "Influence of the Kinship Networks on Farmers’ Willingness to Revitalize Idle Houses," Sustainability, MDPI, vol. 15(13), pages 1-14, June.
    3. Zheng, Linyi, 2024. "Big hands holding small hands: The role of new agricultural operating entities in farmland abandonment," Food Policy, Elsevier, vol. 123(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yinhao Wu & Hengyun Ma, 2022. "How Much Farmland Are Farmers Willing to Lease? The Construction and Evaluation of a Farmland Transfer Supply Function with Application to a Case Study in China," Land, MDPI, vol. 12(1), pages 1-12, December.
    2. Callahan, Scott & Ifft, Jennifer & Michaud, Clayton P., 2022. "The impact of countercyclical farm programs on agricultural land values," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322579, Agricultural and Applied Economics Association.
    3. Oltmer, Katrin & Florax, Raymond J.G.M., 2001. "Impacts Of Agricultural Policy Reform On Land Prices: A Quantitative Analysis Of The Literature," 2001 Annual meeting, August 5-8, Chicago, IL 20507, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. Shaik, Saleem & Atwood, Joseph A. & Helmers, Glenn A., 2012. "Did 1933 new deal legislation contribute to farm real estate values: A regional analysis," Journal of Policy Modeling, Elsevier, vol. 34(6), pages 801-816.
    5. Turvey, Calum G. & Ellinger, Paul N., 2002. "A Comparative Study of the Financial Performance of Grain and Oilseed Farms in Ontario and Illinois," 2002 Regional Committee NC-221, October 7-8, 2002, Denver, Colorado 132376, Regional Research Committee NC-1014: Agricultural and Rural Finance Markets in Transition.
    6. Yan, Jinming & Yang, Yumeng & Xia, Fangzhou, 2021. "Subjective land ownership and the endowment effect in land markets: A case study of the farmland “three rights separation” reform in China," Land Use Policy, Elsevier, vol. 101(C).
    7. Laure Latruffe & Chantal Le Mouël, 2009. "Capitalization Of Government Support In Agricultural Land Prices: What Do We Know?," Journal of Economic Surveys, Wiley Blackwell, vol. 23(4), pages 659-691, September.
    8. Li, Fang & Feng, Shuyi & Lu, Hualiang & Qu, Futian & D’Haese, Marijke, 2021. "How do non-farm employment and agricultural mechanization impact on large-scale farming? A spatial panel data analysis from Jiangsu Province, China," Land Use Policy, Elsevier, vol. 107(C).
    9. Pavel Ciaian & Edoardo Baldoni & d'Artis Kancs & Dušan Drabik, 2021. "The Capitalization of Agricultural Subsidies into Land Prices," Annual Review of Resource Economics, Annual Reviews, vol. 13(1), pages 17-38, October.
    10. Breustedt, Gunnar & Habermann, Hendrik, 2009. "Determinants of Agricultural Cash Rents in Germany: A Spatial Econometric Analysis for Farm-Level Data," 2009 Conference, August 16-22, 2009, Beijing, China 51685, International Association of Agricultural Economists.
    11. Patton, Myles & Kostov, Philip & McErlean, Seamus & Moss, Joan, 2008. "Assessing the influence of direct payments on the rental value of agricultural land," Food Policy, Elsevier, vol. 33(5), pages 397-405, October.
    12. Lin, Wensheng & Huang, Jikun, 2021. "Impacts of agricultural incentive policies on land rental prices: New evidence from China," Food Policy, Elsevier, vol. 104(C).
    13. Lin Zhou & Walter Timo de Vries, 2022. "Collective Action for the Market-Based Reform of Land Element in China: The Role of Trust," Land, MDPI, vol. 11(6), pages 1-16, June.
    14. Yiqing Su & Qiaoyuan Huang & Qi Meng & Liangzhen Zang & Hua Xiao, 2023. "Socialized Farmland Operation—An Institutional Interpretation of Farmland Scale Management," Sustainability, MDPI, vol. 15(4), pages 1-21, February.
    15. Zhou, Yang & Zhong, Zhen & Cheng, Guoqiang, 2023. "Cultivated land loss and construction land expansion in China: Evidence from national land surveys in 1996, 2009 and 2019," Land Use Policy, Elsevier, vol. 125(C).
    16. Feichtinger, Paul & Salhofer, Klaus, 2013. "What Do We Know about the Influence of Agricultural Support on Agricultural Land Prices?," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 62(02), pages 1-15, May.
    17. Feichtinger, Paul & Salhofer, Klaus, 2013. "What Do We Know about the Influence of Agricultural Support on Agricultural Land Prices?," Journal of International Agricultural Trade and Development, Journal of International Agricultural Trade and Development, vol. 62(2).
    18. Richard J Vyn & James Rude, 2020. "The Influence of Supply Management on Farmland Values in Ontario," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 42(4), pages 815-834, December.
    19. Lin Zhou & Walter Timo de Vries & Alexandra Panman & Fei Gao & Chenyu Fang, 2023. "Evaluating Collective Action for Effective Land Policy Reform in Developing Country Contexts: The Construction and Validation of Dimensions and Indicators," Land, MDPI, vol. 12(7), pages 1-21, July.
    20. Liangzhen Zang & Yahua Wang & Yiqing Su, 2021. "Does Farmland Scale Management Promote Rural Collective Action? An Empirical Study of Canal Irrigation Systems in China," Land, MDPI, vol. 10(11), pages 1-25, November.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:lauspo:v:119:y:2022:i:c:s0264837722001508. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joice Jiang (email available below). General contact details of provider: https://www.journals.elsevier.com/land-use-policy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.