How do Collective Operating Construction Land (COCL) Transactions affect rural residents’ property income? Evidence from rural Deqing County, China

Abstract

Granting farmers complete land property rights to increase their income has been the core objective of land reforms in China. In 2015, the reform of entry of collective operating construction land (COCL) into market was implemented across China, providing rural collectives with transfer rights of COCL. However, its effects on farmers’ income have not been investigated through empirical studies. Taking Deqing County, Zhejiang Province as an example, this paper first discusses the operation of COCL transactions and its effects on farmers’ property income based on property rights theorem. Then, using annual county-level data for 2009–2019, we conduct a comparative case study using the Synthetic Control Method to examine whether COCL transactions contribute to farmers’ property income growth. The results show that: (1) By the year 2019, annual per-capita farmers’ property income in Deqing was about 334.02 yuan higher than what it would has been in the absence of COCL transactions. (2) COCL transactions have positive and significant effect on farmers’ property income. This study provides a reference on how to convert COCL into farmers’ income, and promotes the implementation of COCL reform in China.