two no policy" where land is redistributed to establish an egalitarian landholding structure before imposing the "two nos" policy and longer-term tenure security.<sup>8</sup> Descriptive evidence on farmers' first preferences indicates that there **is** indeed considerable support for the policy of "two nos". Either immediate imposition of the "two nos" policy or implementation of a large adjustment that is then followed by the "two nos" policy is supported by about two thirds of households in Guizhou (68%) and Yunnan (64%) but only 42% in Hunan. Most of the households (45% in Guizhou and 43% in Yunnan) prefer to have the "two nos" directly, without going through a redistribution beforehand. Continuing large adjustments, arguably the policy that undermines property rights the most, is preferred only by a very small minority of households (7% in Guizhou, 14% and 13% in Hunan and Yunnan) while small adjustments are the first preference of between one fourth (24% in Guizhou; 28% in Yunnan) to almost one half (44% in Hunan). To assess the policy relevance of these figures **it is** important to assess the extent to which they might be nationally representative. The nation-wide study by Schwarzwalder et al. (2001) broadly supports our findings for the provinces where there is an overlap (72%, 63% and 67% of households m Guizhou, Yunnan, and Hunan who do not oppose a policy of "two nos") and, in addition, points towards a high level of support for stable land distribution nation-wide, though this support is slightly higher in poor provinces. Interestingly, even though this survey finds that support for the "two no" policy was slightly higher in Guizhou than in other provinces, this study finds that support for such a policy **in** Guizhou is only about 10% higher than the average for the eight poorest provinces (Guizhou, Yunnan, Hunan, Jiangxi, Jlim, Heilongjiang, Guangxi, and Shaanxi), clearly too little to argue that this policy might have been imposed endogenously in Guizhou. While definitions are slightly different, this is at variance with an earlier study by Kung and Liu (1997) who, based on a smaller and geographically more concentrated sample, found 62%of households to be in favor of periodic redistnbution. Exploring the methodological and substantive reasons underlying such differences in more detail would be an important area for future research.<sup>9</sup>

# **3.4 Investment, shocks, and coping strategies**

To gain insight into how exogenous land right arrangements affect households' choice of asset portfolio, we distinguish between investments in agriculture, education, and non-agricultural enterprises. Table 4 illustrates that the most frequent type of investment is in consumer durables,

> 8 Prosterman et al (2000) claim that such a policy has significant support **in** many rural areas of **China**

> **9** A study of Meitan, the county where the onginal policy expenment had been conducted (Kung forthcoming), finds evidence for a significant decline **in** support for a policy of no reallocation and a level of support for a policy of no readjustment which, with about 32%, at present, is less than half of what emerges from our survey This draws attention to the fact that changes in the property nghts regime will have distnbutonal implications **in** addition to their impact on efficiency Differences **in** sampling are a pnme candidate for such vanation **in** results To the extent that our sample is a true random sample of the population **in** the provinces to be covered (as compared to only one county **in** the case of Kung), we are reasonably confident with respect to the accuracy of the numbers obtained.

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