those with a value of more than Y 5,000, point towards<sup>informalborrowingand migration asthe most</sup> common coping strategies - applied by about 60% and 35%<sup>respectively.Comparedto this,the share</sup> of households who chose to reduce consumption or to sell<sup>assets was,with less than 9%,modest.Also,</sup> descriptives fail to substantiate fears that the implementation<sup>ofthe"two nos"policyin Guizhou</sup> would have undermined households' ability to draw on existing<sup>safetynetsasawaytocopewith</sup> shocks. In fact, of all the households included in<sup>thesample,dis-investmentorreductionof</sup> consumption was, with 2% and 0% (compared to<sup>5%and9%and7%and 6%</sup><sup>**in**Hunan andYunnan)</sup> least observed in Guizhou.

_Inequality:_ To obtain an indication of the distribution of<sup>landin thevillages,weaskedvillageleaders</sup> for the share of households with more than double or<sup>lessthanhalfof theaveragevillageland</sup> endowment. Responses indicate that land distnbution<sup>ismostunequalinYunnan,followedby</sup> Guizhou and Hunan but that there were only limited changes<sup>overtime.This evidenceissupportedby</sup> data on individual land endowments for households included<sup>inthesample.Thedatapomtto</sup> differences in the mean per capita endowments and the<sup>structureof landholdmgsacrossprovinces.13</sup> Comparing the distribution of income and land holdmgs<sup>highlightsthat,inallprovinces,the</sup> distribution of land is more equal than the distnbution of<sup>income;incomeGini coefficientsare0.50</sup><sup>**in**</sup> Hunan, 0.48 in Guizhou, and 0.49 in Yunnan while the<sup>Ginicoefficientfortotalland areais 0.33in</sup> Yunnan, 0.38 in Guizhou, and 0.42 in Hunan. As households<sup>wereaskedabout theevolutionof their</sup> land holding over time, we can test for systematic differences in the<sup>evolution of landinequalityacross</sup> the three provinces. Doing so does not reveal any significant<sup>differences, thus allowingus to rejectthe</sup> hypothesis of the "two nos" policy having led to a systematic<sup>worsening of land holdings.</sup>

# **4. Econometric evidence**

This section contains econometric evidence concerming the three main<sup>policy questions of interest.We</sup> first explore the extent to which land rights affect investment<sup>**in**agricultureand,through the impacton</sup> households' ability to cope with shocks, would possibly<sup>affect human capitalaccumulationandnon-</sup> agricultural enterprise investment. Evidence indicates that<sup>moresecureland rightsand higher levelsof</sup> transferability increase producers' propensity to mvest<sup>in agriculture.Householdswho experience</sup> shocks reduce non-agricultural investments as well as the<sup>levelof schoolingof childrenwhomake</sup> their educational decisions dunng the time period of the<sup>shock.At thesame timethereisno evidence</sup>

> **13** The natural endowment **is** most favorable **in** Hunan.<sup>In this provmce, relativelylarge areasof paddy land(075 mu per capitaas compared</sup> to 0.31 mu **in** Yunnan and 0 4 mu in Guizhou) are available,<sup>virtuallyallhouseholds (80%as comparedto 31%</sup><sup>**in**Guizhouand 24%</sup><sup>**in**</sup> Hunan) are able to access waste land and the area available<sup>**is**muchlarger(1.1mu as comparedto onlyslightly morethan 01 mu</sup><sup>**in**the other</sup> two provinces, and forest is more plentiful (3 22 mu as compared<sup>to2 5 mu inYunnanand 0.48 muin Guizhou).</sup>

_13_