To check if our results might be due to structural differences other than the rural-urban integration reform, we perform a placebo test where equation (3) is estimated using a _Rijt_ corresponding to a putative reform in 2006/07. Estimates of _β2_ from this regression are reported throughout. Also, as studies found evidence of large potential agglomeration effects that are not always fully utilized (Au and Henderson 2006a), we test for heterogeneity of effects with economic distance to Chengdu city center, measured by either road travel time or the Euclidean distance between the village center to downtown Chengdu.<sup>10</sup>

# **3. Data, descriptive statistics, and analytical approach**

Although agriculture was the main source of livelihood in our sample villages, strong diversification trends are visible over the 2004-13 period covered by our data. While villages just outside and inside the prefecture boundary differed from each other in terms of average land endowments, public sector interventions in the land sector, and the level of diversification, we cannot reject the hypothesis of parallel trends in all of these variables prior to reform except two, justifying a discontinuity design. Inside Chengdu, land certification was swift and participatory, making it of interest to explore whether it triggered changes in outcomes.

# **3.1 Data and descriptive statistics**

To analyze reform effects, we use data from a survey of villages along comparable stretches of the Chengdu prefecture border conducted by Development Research Center of the State Council (DRC) in May 2014. The sample comprises 529 villages; 288 inside and 241 outside the border. To illustrate the location of sample villages relative to the border and to Chengdu city, figure 1 plots coordinates of the centers for treatment and control villages. We note that, even after excluding the Western part of the prefecture that lacks comparability,<sup>11</sup> our sample includes a high level of variability: villages in two pockets in the Northeast and South are located along expressways and thus easily accessed from the city center in less than 30 minutes. Sample villages towards the East and the West are in mountainous settings that are, with road distances of some 150 km to Chengdu city center and a travel time of 3-4 hours, economically more remote. With a mean distance of 1.9 km between the village center and the prefecture boundary, treatment and control villages are, however, very close to each other.

Information on village characteristics, incidence of land reallocations and expropriations, land transfers, and existence of enterprises for every year between 2004 and 2013 was obtained from formal village records. It is complemented with recall data on informal land transfers from current and previous village leaders. For Chengdu villages, administrative data collected in the course of land registration were added.

> 10 Empirically, we use the z-score of both variables and obtained road travel time from google maps. Results for both are substantively very similar. We report the one using travel time which is more intuitive. Results using the straight line distance are available upon request.

> 11The Western part of Chengdu prefecture consists of a of a rapidly ascending mountain range that contains two large national parks and borders Qiang and Aba Tibetan autonomous prefectures. As this would compromise comparability, we decided not to survey any villages in these areas.

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