Descriptive statistics for key variables at the national and regional level as reported in table 1,<sup>5</sup> point towards differences in income, migration, endowments, and local policy across regions and highlight the increasing importance of land markets. While primary education has become almost universal, 52% and 18% of households have a head with secondary or high school education, respectively. Schooling attainment is lower in the Southwest (46% with secondary and 9% with high school), followed by the Center (45% and 18%, respectively) and the North and Coast regions. The mean per capita land endowment is 1.68 mu,<sup>6</sup> a figure that ranges from 1.13 in the Southwest to 2.30 in the Northeast. The amount of non-land assets, about 27,000 Y on average,<sup>7</sup> varies across provinces, from 36,000 in the Coast to 17,000 in the Southwest, the country’s poorest region. With a contribution of about 58% to total income, agriculture remains the most important source of income overall, ranging from almost-two thirds (63%) in the Southwest to slightly less than half of the income in the Coast.

Not surprisingly, as land had been distributed on an egalitarian basis in the 1980s and many villages had conducted land reallocations to respond to demographic changes since then (Rozelle _et al._ 2002), the Gini coefficient of the land ownership distribution is, with 0.41, lower than the 0.75 or 0.89 found in India or Brazil (Deininger and Squire 1998). 13% and 10% of producers rented in or out, respectively during 2002-2004. Still, most rental transactions remained informal; 60% of participants reported to have a contract, less than 10% of contracts were in writing and 75% open ended while the remaining 25% were for about 3 years. Interestingly, almost 40% of producers (54% in the Southwest and 59% in the Northeast) rent in from a relative. With participation rates of 21% and 15%, land rental is most active in the Central and Southwest regions which also have the highest levels of migration, suggesting links between these phenomena (Kung 2002). 18% of households -from 25% in the Center to 10% in the Northeast- include at least one migrant and while 17% of migrants crossed provincial boundaries in the Coast, more than two thirds did so in the Center. Institutional arrangements likely to be of relevance for rental decisions differ across regions. While the 1998 land law mandates issuance of land use certificates, only 81% -from 74% in the Northeast to 92% in the Southwest- had certificates. In 2001, about 10% of villages, from 4% in the Southwest to 16% in the Coast, had a policy allowing the village to take back land left uncultivated for one season and 14% (from 26% in the Coast to 5% in the Southwest) prohibited land rental to outsiders.

Splitting the sample by type of land market participation (appendix table 1) illustrates such trends. With per capita land endowments of 2.1 mu for ‘landlords’ vs. 1.5 mu for tenants, rental equalizes factor ratios. Also, as ‘landlords’ rely less on agricultural income than tenants (53% vs. 65%) but

> between information obtained from the tenant and the landlord. This is not surprising as potential contracting partners have strong incentives to obtain good information on the productive potential of specific plots they are going to rent or the economic situation of potential partners. While there may be some residual noise in the data, this strongly argues against potential systematic bias.

> 5 The four regions are defined as follows: North and Northeast includes Liaoning and Henan provinces, Coastal Zhejiang and Shandong, the Center Henan and Hubei, and the Southwest Hunan, Sichuan and Guizhou provinces. In table 1, information in the two top panels is from NBS’ household survey while panels 2 and 3 are based on the follow-up survey of those renting land and panel 5 on our village survey. 6 One mu equals 1/15th of a hectare.

> 7 At the time of the survey, the exchange rate was approximately 8 Y to 1 US dollar.

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