Land Conversion Across Cities in China
41 Pages Posted: 18 Mar 2019 Last revised: 14 Mar 2020
Date Written: February 26, 2019
The Chinese government has been using annual quotas to control the amount of farm-land that can be converted for urban uses in cities. Using a sample of more than 1.5 million land-lease transactions during 2007-2016, we document facts on land conversion for urban development in China. We present evidence that land conversion quotas have been increasingly misallocated across cities in that a growing share of land conversion is occurring in less productive cities. A city-level production function is estimated for counterfactual analysis. Based on estimated parameters, we assess the economic losses from misallocation of land conversion quotas across cities in China and calculate the potential gains from reallocating land quotas to cities where urban land is more productive.
Keywords: Land Conversion, Land Quota, Misallocation, Urbanization, China
JEL Classification: R12, R13, R14, R52, R58
Suggested Citation: Suggested Citation