Resource information
The importance of land rental for
overall economic development has long been recognized in
theory, yet empirical evidence on the productivity and
equity impacts of such markets and the extent to which they
realize their potential has been scant. Representative data
from China's nine most important agricultural provinces
illustrate the impact of rental markets on households'
economic strategies and welfare, and the productivity of
land use at the plot level. Although there are positive
impacts in each of these dimensions, transaction costs
constrain participation by many producers, thus preventing
rental markets from attaining their full potential. The
paper identifies factors that increase transaction costs and
provides a rough estimate of the productivity and equity
impacts of removing them.
