Rural property rights, returns to scale and contracts

Project overview

Project lead: Elaine Liu, University of Houston

Start date: 25 August 2012

End date: 24 October 2014

Research Council project page

This research comprised two projects that examined the impact of rural land rights on the decisions and outcomes of farmers in China. Previously farmers only had use rights and could not legally engage in any market land transaction such as selling or renting.

In the first project, the research team studied whether giving farmers leasing rights will improve their outcome. In the second, the researchers studied the types and terms of contracts that farmers sign when allowing other farmers or agricultural firms to use their land, and analysed the impact of these contract choices on agricultural investment and productivity.

This research agenda built on economic theories that suggest that some types of contracts may lead to lower investment and lower levels of productivity. It provides valuable insight into how land market interactions among farmers and between farmers and agricultural firms affect rural economic growth.