Off-farm employments and land rental behavior: evidence from rural China

Che, Yi

doi:10.1108/caer-09-2014-0086

Cited by 64 publications

(68 citation statements)

References 26 publications

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“…Considering the sample ranged from 2003 to 2013, the year dummies are also included in the model, to capture the unobservable year-specific effects. In practice, the Huber-White robust estimator of variance is calculated for appropriate inference [35].…”

Section: Descriptive Statisticsmentioning

confidence: 99%

The Effect of Off-Farm Employment on Forestland Transfers in China: A Simultaneous-Equation Tobit Model Estimation

et al. 2017

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China's new round tenure reform has devolved collective forests to individuals on an egalitarian basis. To balance the equity-efficiency dilemma, forestland transfers are highly advocated by policymakers. However, the forestland rental market is still inactive after the reform. To examine the role of off-farm employment in forestland transfers, a simultaneous Tobit system of equations was employed to account for the endogeneity, interdependency, and censoring issues. Accordingly, the Nelson-Olson two-stage procedure, embedded with a multivariate Tobit estimator, was applied to a nationally representative dataset. The estimation results showed that off-farm employment plays a significantly negative role in forestland rent-in, at the 5% risk level. However, off-farm activities had no significant effect on forestland rent-out. Considering China's specific situation, a reasonable explanation is that households hold forestland as a crucial means of social security against the risk of unemployment. In both rent-in and rent-out equations, high transaction costs are one of the main obstacles impeding forestland transfer. A remarkable finding was that forestland transactions occurred with a statistically significant factor equalization effect, which would be helpful to adjust the mismatched labor-land ratio and improve the land-use efficiency.

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Section: Descriptive Statisticsmentioning

confidence: 99%

The Effect of Off-Farm Employment on Forestland Transfers in China: A Simultaneous-Equation Tobit Model Estimation

et al. 2017

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“…Some studies found that off-farm employment and migration had critical positive impacts on farmland renting-out behavior of rural households [22,26,27]. Not only did availability of off-farm employment significantly improve farmland rental, but tenure security and agricultural ability also played a critical role in farmland rental [28,29].…”

Section: Introductionmentioning

confidence: 99%

Farmland Rental and Productivity of Wheat and Maize: An Empirical Study in Gansu, China

et al. 2017

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Abstract:The rapid growth of farmland rental markets in China raises questions about the association of farmland rental and agricultural productivity. Although this issue has been extensively studied, the majority of studies have focused on yields and technical efficiency, with input use and cost efficiency receiving little attention. This study aimed to determine the statistical association of wheat and maize farmers' farmland rental behaviors (renting land, not renting land and renting out land) and input use, and the consequent association of farmers' farmland rental behaviors and cost efficiency. For this purpose, the linear regression model and stochastic frontier model were employed, based on a survey data of 419 wheat and maize farmers in 25 villages in five counties of Gansu Province, China. The study found that farmland rental enhanced productivity and sustainability of agriculture through transferring farmland from households with less productivity to those with high productivity, and it was also helpful to reducing the consumption of fertilizers and chemicals in agricultural production. The results suggest that replacing labor with machines is an important way to reduce production costs, and households specializing in agricultural production use more rational amounts of fertilizers and chemicals than those with low productivity. Thus, the machinery purchase policy in China should continue to give great benefit to farmers. In addition, the machinery purchase subsidization policy has achieved satisfactory results in China, and it could be a good reference for other developing countries. However, some efficiency loss was found in households that rented out their land, and policy makers need to pay some attention to these households.

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“…Both forestland transfer and off-farm work are determined jointly in households' decision-making process. The simultaneous causality leads to an endogeneity of off-farm employment, which can bias the estimation results [16,19,[27][28][29]. Meanwhile, the fact that most of the sample households choose not to transfer their forestland implies that the dependent variable is censored.…”

Section: Model Specificationmentioning

confidence: 99%

“…Endogeneity is a theoretically justified assumption as the land transfer and off-farm employment must be simultaneously determined in households' decision-making [27]. This assumption has also gained empirical evidences [16,19,28,29] (For instance, Feng and Heerink [28] and Liu et al [29] have found that households' land transfer decisions and off-farm employment decisions are closely interrelated. However, their studies focus on the context of farmland transfer with the data from specific regions, while this paper employs nationally representative data to investigate the behavior of forestland transfer).…”

Section: Introductionmentioning

confidence: 99%

“…In China's farmland transfer market, besides the tenure security, the development of parallel factor markets, especially the off-farm labor market, is seen as another crucial determinant of land transfer [7,[14][15][16][17][18]. The rationale is that because off-farm activity has become the main source of household income in rural China, off-farm employment carries great weight when farmers allocate labor between farmland cultivation and off-farm work [19].…”

Section: Introductionmentioning

confidence: 99%

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Institutional Regime, Off-Farm Employment, and the Interaction Effect: What are the Determinants of Households’ Forestland Transfer in China?

et al. 2017

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Abstract:The development of the land rental market has been widely attributed to the associated institutional regime and the functioning of the off-farm labor market. However, little is known of the interaction effect of these two factors. To fill this gap, we employ a nationwide representative household dataset to investigate the effects of China's collective forest tenure reform (CFTR) and off-farm employment on forestland transfer in China. Special interest is focused on their potential interaction effect. The Smith-Blundell instrumental variable tobit model is adopted to account for the endogeneity of off-farm employment. The estimation results show that both the tenure reform and off-farm employment significantly influence forestland transactions. However, compared to the positive effect of the reform on both renting in and renting out forestland, the effect of off-farm employment is mixed, that is, its effect is negative when forestland is rented in but positive on rent-out decisions. An important finding is that the CFTR imposes a negative enhancement effect on forestland rent-in through its interaction term with off-farm employment. In contrast, the enhancement effect on rent-out is not statistically significant, which may be due to the neutralization by the endowment effect of the CFTR.

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Off-farm employments and land rental behavior: evidence from rural China

Cited by 64 publications

References 26 publications

The Effect of Off-Farm Employment on Forestland Transfers in China: A Simultaneous-Equation Tobit Model Estimation

The Effect of Off-Farm Employment on Forestland Transfers in China: A Simultaneous-Equation Tobit Model Estimation

Farmland Rental and Productivity of Wheat and Maize: An Empirical Study in Gansu, China

Institutional Regime, Off-Farm Employment, and the Interaction Effect: What are the Determinants of Households’ Forestland Transfer in China?

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