Quantile regression

Linguistics

Engineering

Philosophy

Capitalization

Capitalization rate

Real estate investment trust

China

Archaeology

Economics

Market economy

Civil engineering

Real estate

Payment

Business

Subsidy

Geography

Political science

Econometrics

Finance

Natural resource economics

Agricultural economics

Renting

Land Use Policy

This study investigates the factors affecting farmland rental prices in China. Special emphasis is put on the capitalization of China’s grain subsidy program into land rental rates. Using national representative farm-level data, Heckman sample selection model, and quantile regression (QR) approach, we find that a 10% increase in grain subsidy payments for contracted farmland increases the farmland rental price by about 1%. However, quantile regression results show that the capitalization rate is heterogeneous and varies across the distribution. Findings suggest that family labor input and farm location are important factors driving up farmland rental prices. Moreover, for farm size, rental experience, and natural disaster we detect a negative impact on land rental prices.

Factors affecting farmland rental in rural China: Evidence of capitalization of grain subsidy payments