An analysis of the poverty reduction effects on land transfer: Evidence from rural areas in China

Abstract

This paper develops a multidimensional poverty index (MPI) evaluation system using multiple measures. We use the China Family Panel Study (CFPS) data to build balanced panel data from 2012 to 2018. Employing the probit model to analyze the impact of land transfer on relative poverty incidence, as well as utilizing the two-way fixed effects model and the logit model, we approach the issue from the perspective of multidimensional relative poverty identification. Our study indicates a decrease in relative poverty among rural households since 2012. Nonetheless, the overall incidence of relative poverty among rural households in China remains high at 20.6%, highlighting the severity of this issue in rural China. Moreover, we examine the heterogeneity of the poverty reduction effects of land transfer-in and land transfer-out. Land transfer can significantly reduce the incidence of relative poverty among rural households, with distinct mechanisms for land transfer-in and land transfer-out. Land transfer-in primarily reduces the relative poverty incidence of rural households through the education, housing, and land dimensions, while land transfer-out focuses on the quality-of-life dimension. Overall, land transfer-out has a more significant poverty reduction effect than land transfer-in. Furthermore, our study reveals that the reduction effect of land transfer on the incidence of relative poverty among rural households persists for at least two years, but by the fourth year, this effect disappears.