University of Sussex
Institutional Affiliation: University of Sussex
NBER Working Papers and Publications
|December 2017||Property Rights, Land Misallocation and Agricultural Efficiency in China|
with Elaine M. Liu, Shing-Yi Wang, Yongxiang Wang: w24099
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.