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

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

Land Use Policy, 2020, vol. 90, issue C

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.

Keywords: Farmland rental prices; Grain subsidy; Capitalization rate; Quantile regression (search for similar items in EconPapers)
JEL-codes: C31 Q15 Q18 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (20)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:lauspo:v:90:y:2020:i:c:s0264837719310671

DOI: 10.1016/j.landusepol.2019.104275

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