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Efficiency of Land Allocation through Tenancy Markets: Evidence from China

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  • Shingo Kimura
  • Keijiro Otsuka
  • Tetsushi Sonobe
  • Scott Rozelle

Abstract

Tenancy markets provide an opportunity to trade land between labor-scarce farm households and labor-abundant households. In China and other rapidly growing countries in Asia where rural to urban migration is becoming active, facilitating well-functioning tenancy markets is important to increase farm size and farmer's income. In China, however, individual land rights are weak and in many communities land may be reallocated by village leaders to other households if it is rented out. We hypothesize that the risk of expropriation of rented-out land is a major constraint on land rental transactions in China. We find empirical evidence in support of this hypothesis using farm household data.

Suggested Citation

  • Shingo Kimura & Keijiro Otsuka & Tetsushi Sonobe & Scott Rozelle, 2011. "Efficiency of Land Allocation through Tenancy Markets: Evidence from China," Economic Development and Cultural Change, University of Chicago Press, vol. 59(3), pages 485-510.
    • Handle: RePEc:ucp:ecdecc:doi:10.1086/649639
    DOI: 10.1086/649639
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    References listed on IDEAS

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