Factors affecting farmland rental in rural China: Evidence of capitalization of grain subsidy payments

Jian Zhang, Ashok K. Mishra, Stefan Hirsch, Xiaoshun Li

Research output: Contribution to journalArticle

Abstract

This study investigates the factors affecting farmland rental prices in China. Special emphasis is put on the capitalization of China's grain subsidy program into land rental rates. Using national representative farm-level data, Heckman sample selection model, and quantile regression (QR) approach, we find that a 10% increase in grain subsidy payments for contracted farmland increases the farmland rental price by about 1%. However, quantile regression results show that the capitalization rate is heterogeneous and varies across the distribution. Findings suggest that family labor input and farm location are important factors driving up farmland rental prices. Moreover, for farm size, rental experience, and natural disaster we detect a negative impact on land rental prices.

Original languageEnglish (US)
Article number104275
JournalLand Use Policy
Volume90
DOIs
StatePublished - Jan 2020
Externally publishedYes

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Keywords

  • Capitalization rate
  • Farmland rental prices
  • Grain subsidy
  • Quantile regression

ASJC Scopus subject areas

  • Forestry
  • Geography, Planning and Development
  • Nature and Landscape Conservation
  • Management, Monitoring, Policy and Law

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