The influence of land titling on the disparity between willingness to accept and willingness to pay values

Wenjue Zhu, Krishna Paudel and Biliang Luo

Journal of Environmental Planning and Management, 2021, vol. 64, issue 5, 930-953

Abstract: Land titling, which aims to promote the transfer of farmland in China by providing property rights to landowners, may not be working as intended due to the presence of an endowment effect. The implications of the endowment effect are that it creates a substantial disparity between the willingness to accept (WTA) and willingness to pay (WTP) values for agricultural land parcels. An inflated WTA/WTP value hinders farmland transfer to those who have the comparative advantage in farmland management. We develop a conceptual model to understand the factors influencing the disparity between landowners’ WTA/WTP values. The empirical model uses an IV-Tobit model on a dataset collected from a nationwide interview survey of Chinese peasant households in 2015–2016. Results show that land titling further increases the disparity between WTA and WTP after the endogeneity issue is resolved. The expectation of the Chinese government that land titling could promote land transfer may not be accurate if the psychological effect of landholding exerts dominance in the land market.

Date: 2021
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Citations: View citations in EconPapers (5)

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DOI: 10.1080/09640568.2020.1796287

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