How Does Rural Household Differentiation Affect the Availability of Farmland Management Right Mortgages in China?

Abstract

ABSTRACT This study employs the Cov-AHP method to determine the weight of each indicator based on the evaluation indicator system for the differentiation level of rural households and adopts a bivariate probit model to estimate the influence of rural households’ differentiation on the availability of farmland management right mortgage. The survey data used were collected for 4,481 rural households in China (Shaanxi Province, Shandong Province, Henan Province, and Ningxia Province). The results showed that the overall household differentiation level has statistically significant impacts on the availability to farmers of farmland management right mortgages. There are significant differences in the capital levels affecting the nominal demand and supply of farmland management right mortgages. More specifically, some rural households with higher physical capital and financial capital have more significant nominal demand for farmland management right mortgages, while rural households with lower financial capital and higher social capital have a higher possibility of getting farmland management right mortgages. In addition, the rural households’ gender, land approval, loan policy, and location have a statistically significant and positive impact on rural households’ demand for this financing, while the rural households’ gender, education, land transfer, per capita income, social interaction, loan policy, loan experience, and location have a statistically significant and positive impact on the supply of this financing to rural households.