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Land Rental Market Participation and Its Impact on Fixed Investment and Household Welfare: Evidence from Chinese Apple Production Sites

Jianyun Hou (), Xuexi Huo () and Runsheng Yin ()
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Jianyun Hou: College of Economics and Management, Northwest Agricultural &Forestry University, Yangling 712100, Shaanxi, China
Xuexi Huo: College of Economics and Management, Northwest Agricultural &Forestry University, Yangling 712100, Shaanxi, China
Runsheng Yin: Department of Forestry, Michigan State University, East Lansing, MI 48823, USA

Sustainability, 2017, vol. 9, issue 11, 1-15

Abstract: Using a large dataset from the specialized apple production sites of China and multiple econometric methods, we identify the main determinants of farmers’ land rental decisions and the effects from renting land in on their investment and economic welfare. It is found that having more effective cultivated land before renting in has a significantly negative effect on the land rented in, that households with rich land endowments or large areas of land rented in usually invest more in fixed assets, and that efficient provisions of credit and insurance are helpful to encourage investments in fixed assets. As a result, renting in land generates gains in terms of agricultural income, total income, and productive expenditure.

Keywords: land rental; investment; welfare; apple production sites; China (search for similar items in EconPapers)
JEL-codes: Q Q0 Q2 Q3 Q5 Q56 O13 (search for similar items in EconPapers)
Date: 2017
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