Study On The Impact Of Land Tenure Security On Households’ Participation In Land Rental Market

As an important way to realize the moderate scale management and agricultural modernization, rural land lease has grasped the attention of policy-makers and the academia. However, China’s current rural land rental market develops slowly, which means more studies should focus on factors that can affect the development of land rental market. As the institutional foundation for land transactions, rural land property rights security has received extensive attention of scholars. Therefore, in order to improve land system reform and promote the development of land rental market, it is of great importance to study the impact of land tenure security with different levels on land rental market development.This paper used household-level data collected from three counties in Jiangxi province in 2011, built Probit and Tobit models to study the separate and combined effects of actual tenure security and perceived tenure security on the possibility and intensity of households’ participation in land rental markets and also examine other factors that may affect land lease. Specifically, this paper studied the relationship between actual and perceived tenure security in terms of affecting land rental market by comparing the different results from different models with actual and perceived tenure security respectively. Then, this paper studied the different impact of perceived tenure security on land lease under different actual tenure security status by introducing an interaction term of actual tenure security and perceived tenure security. Finally, based on model results, this paper put forward several relevant policy implications.This paper consists of five chapters. Chapter one includes the background, objectives, contents, methods, the technical route and possible contributions and shortcomings of this paper. Chapter two includes the literature review with respect to the concepts of land tenure security and the impact of land tenure security and other factors on land rental markets and then theoretical analysis framework based on literature review. Chapter three is about the introduction to research area and descriptive statistical analysis on the present situations of land rental market development and land tenure security and the possible relationship between them. This paper found that compared with households who never experienced or had no expectations on land reallocation, those who experienced or had expectations on land reallocation tend to rent in land instead of renting out; compared with households who did not possess or did not attach importance to land certificates, those who had land certificates and thought it was important are more likely to rent land in and less likely to rent land out. The results from the empirical study in Chapter four showed that (1) perceived tenure security had more direct impact on land transfer than actual tenure security, expectations on land reallocation and importance of land certificates had positive impact on land renting in and negative impact on land renting out;(2)compared with households with experience of land reallocation, if those who had never experienced had expectations on land reallocation, they are less likely to rent out; compared with those who possessed land certificates, if households without land certificates attached importance to land certificates, they are more likely to rent in and less likely to rent out. Chapter five includes main conclusions and policy implications. Firstly, land tenure security could promote the development of land rental market by reducing transaction cost; households’ inherent egalitarianism and the characteristics of farmland as personal property led to conclusions contrary to the transaction cost theory; (3) perceived tenure security had more direct impact on land lease than actual tenure security; (4) the impact of perceived tenure security on land transfer mainly reflects in households who did not experience land reallocation or did not have land certificates. Secondly, this article puts forward several relevant policy suggestions including how to improve current land property rights system and how to improve current social security system.