The grassland is the most important resource for the herdsmen in Inner Mongolia, China. In the 1980s, pastureland was administratively allocated based on household size. The subsequent changes in socioeconomic and new household characteristics suggest that adjustment is needed for more efficient land use. This study reviewed the recent progress of the rental market and investigated the herdsmen’s behaviours regarding grassland market transactions in Xilingol League, Inner Mongolia. The economic assumption is that there exists a variation in values by household for each given parcel of land, which drives land transfer to users who can generate higher values. Each household is characterised by its initial pasture landholding, herding facilities and demographics. But the gain from the transfer must be deducted from the transaction costs, and cooperative membership can significantly reduce the transaction costs. An econometric model is developed and tested with data collected from household surveys in the Xilingol League. The results indicate that household size is the most significant variable for land transfer in the long run. Herdsmen have been dynamically adjusting herding equipment and pasture landholdings, allocating labour between herding and non-herding activities in response to these changes in society. Cooperative organisation was found to be significant in facilitating land transfer due to its role in reducing transaction costs. Higher quality land with higher rent is also found to be more likely to transfer since the percentage of the transaction cost is lower than lower quality land.
Multi-scale analysis of rural housing land transition under China's rapid urbanization: The case of Bohai Rim
