An Econometric Study of Decision Making about Rental Land and What Extent It Influences on Productivity in Rural China

Abstract

In this paper, we quantitatively analyzed decision making regarding rental land (zhuanbao), which is the land to which the right of contract of farmland is transferred, and what extent rental land influences productivity, using the MHTS panel dataset which the Research Center of Rural Economy, China created through investigations of the Rural China Fixed Point Observation survey.
In this paper, we make clear the following points. Firstly, we analyzed decision making regarding rental land. As a result, we make clear that tenure types of potential labor in household, performance of farm management and working types to other industries influence decision making regarding land mobilization. Secondly, we analyzed to what extent land mobilization influences productivity with production function, with dummy variable of rental land and rate of rental land. As a result, we make clear that there is no clear improvement of TFP, even if households rent land; on the other hand, the TFP has tended to drop since the end of the 90s. With factor decomposition, which makes use of the result of the above-mentioned estimations, we confirmed these tendencies and make clear that improvement of productivity through rental land is very small.