The Effect of Off-Farm Employment on Forestland Transfers in China : A Simultaneous-Equation Tobit Model Estimation

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Zhang , H , Kuuluvainen , J , Yang , H , Xie , Y & Liu , C 2017 , ' The Effect of Off-Farm Employment on Forestland Transfers in China : A Simultaneous-Equation Tobit Model Estimation ' , Sustainability , vol. 9 , no. 9 , 1645 . https://doi.org/10.3390/su9091645

Title: The Effect of Off-Farm Employment on Forestland Transfers in China : A Simultaneous-Equation Tobit Model Estimation
Author: Zhang, Han; Kuuluvainen, Jari; Yang, Hongqiang; Xie, Yi; Liu, Can
Contributor: University of Helsinki, University of Helsinki
Date: 2017-09
Language: eng
Number of pages: 14
Belongs to series: Sustainability
ISSN: 2071-1050
URI: http://hdl.handle.net/10138/228107
Abstract: China's new round tenure reform has devolved collective forests to individuals on an egalitarian basis. To balance the equity-efficiency dilemma, forestland transfers are highly advocated by policymakers. However, the forestland rental market is still inactive after the reform. To examine the role of off-farm employment in forestland transfers, a simultaneous Tobit system of equations was employed to account for the endogeneity, interdependency, and censoring issues. Accordingly, the Nelson-Olson two-stage procedure, embedded with a multivariate Tobit estimator, was applied to a nationally representative dataset. The estimation results showed that off-farm employment plays a significantly negative role in forestland rent-in, at the 5% risk level. However, off-farm activities had no significant effect on forestland rent-out. Considering China's specific situation, a reasonable explanation is that households hold forestland as a crucial means of social security against the risk of unemployment. In both rent-in and rent-out equations, high transaction costs are one of the main obstacles impeding forestland transfer. A remarkable finding was that forestland transactions occurred with a statistically significant factor equalization effect, which would be helpful to adjust the mismatched labor-land ratio and improve the land-use efficiency.
Subject: collective forest tenure reform
forestland transfer
off-farm employment
simultaneous-equation Tobit model
efficiency
LAND RENTAL MARKETS
RURAL CHINA
TENURE REFORM
INSTITUTIONAL CHANGE
DEPENDENT VARIABLES
JIANGXI-PROVINCE
LABOR MIGRATION
ALLOCATION
GROWTH
HOUSEHOLDS
1172 Environmental sciences
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