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The influence of land titling on the disparity between willingness to accept and willingness to pay values

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  • Wenjue Zhu
  • Krishna P. Paudel
  • Biliang Luo

Abstract

Land titling, which aims to promote the transfer of farmland in China by providing property rights to landowners, may not be working as intended due to the presence of an endowment effect. The implications of the endowment effect are that it creates a substantial disparity between the willingness to accept (WTA) and willingness to pay (WTP) values for agricultural land parcels. An inflated WTA/WTP value hinders farmland transfer to those who have the comparative advantage in farmland management. We develop a conceptual model to understand the factors influencing the disparity between landowners’ WTA/WTP values. The empirical model uses an IV-Tobit model on a dataset collected from a nationwide interview survey of Chinese peasant households in 2015–2016. Results show that land titling further increases the disparity between WTA and WTP after the endogeneity issue is resolved. The expectation of the Chinese government that land titling could promote land transfer may not be accurate if the psychological effect of landholding exerts dominance in the land market.

Suggested Citation

  • Wenjue Zhu & Krishna P. Paudel & Biliang Luo, 2021. "The influence of land titling on the disparity between willingness to accept and willingness to pay values," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 64(5), pages 930-953, April.
    • Handle: RePEc:taf:jenpmg:v:64:y:2021:i:5:p:930-953
    DOI: 10.1080/09640568.2020.1796287
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    Cited by:

    1. Zou, Baoling & Mishra, Ashok K., 2022. "Engaging Information Technology in Farmland Rental Market: An Empirical Study from Rural China," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322265, Agricultural and Applied Economics Association.
    2. Jiang, Meishan & Paudel, Krishna P. & Mi, Yunsheng & Li, Jingrong, 2023. "Farmland transfer and rural financial structure: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 90(C).
    3. Yang, Wei & Vatsa, Puneet & Ma, Wanglin & Zheng, Hongyun, 2023. "Does mobile payment adoption really increase online shopping expenditure in China: A gender-differential analysis," Economic Analysis and Policy, Elsevier, vol. 77(C), pages 99-110.
    4. Lingying Lu & Guoliang Xu & Zhiyuan Li & Chunyan Wan, 2022. "Understanding the Farmland Rights Confirmation Policy from the Perspective of Farmers: Evidence from Jiangxi, China," IJERPH, MDPI, vol. 19(18), pages 1-13, September.
    5. Liu, Kai & Zhu, Wenjue & Luo, Mingzhong, 2022. "Land integration and titling policy in China: Institutional barriers and countermeasures," Land Use Policy, Elsevier, vol. 112(C).

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