 China's new agricultural subsidy and land rental market development: The dual perspective of efficiency and equityJian Zhang, Ashok K. Mishra and Linyi Zheng China Economic Review, 2025, vol. 92, issue C Abstract: This study investigates the impact of China's agricultural subsidies on farmers' decisions to participate in the land rental market and analyzes their effects on efficiency and equity. The study uses a double-hurdle method with panel data from rural China. Results show that, on average, a 1 % increase in agricultural subsidies increases the likelihood of farm households renting-in land by 1.0 % and the total amount of land rented-in by 0.6 %. Agricultural subsidies improve the efficiency of the farmland rental market, facilitating the transfer of land to more efficient households. However, agricultural subsidies also tend to benefit village elites more, incentivizing them to acquire land, thus reducing the equity of the land rental market. Mechanism analysis reveals that new subsidies increased farm households' income and alleviated liquidity constraints, improving the comparative returns to farming. Keywords: Land rental; land contract rights; Cobb-Douglas; Farming ability; Household income; Efficiency (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:chieco:v:92:y:2025:i:c:s1043951x25000781 DOI: 10.1016/j.chieco.2025.102420 Access Statistics for this article China Economic Review is currently edited by B.M. Fleisher, K. X. D. Huang, M.E. Lovely, Y. Wen, X. Zhang and X. Zhu More articles in China Economic Review from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.