1. Introduction
Land resources have played a crucial role in economic structural transformation and agricultural modernization [
1,
2,
3]. As the largest developing country, the Household Responsibility System (HRS) implemented in 1978 provides conditions for the Chinese growth miracle [
4], and the core of the HRS is to mobilize the enthusiasm of farmers by clarifying property rights [
1,
5], thereby improving the efficiency of land productivity. Since 2014, the Chinese government has implemented the “Three Property Rights Separation” (TPRS, that is, land ownership, contractual rights and management rights are divided, land ownership belongs to rural collectives, contractual rights belong to the farmers, and management rights can be transferred and owned by the actual operator) reform to activate the land transfer market and improve the efficiency of land resources allocation [
6,
7]. According to the National Bureau of Statistics of China, from 2004 to 2019, the transfer area of farmland contracted by farmers increased from 3.89 million hm
2 to 37.18 million hm
2. The scale of land transfer is constantly expanding. In the meantime, the enthusiasm of rural households to participate in the land transfer market is also increasing. Based on the CFPS dataset, from 2012 to 2018, the rate of rural households who have transferred land in increased from 9.6% to 14.87%.
Land transfer is conducive to rural poverty reduction and market commercialization [
8]. Under the background of continuous development and improvement of the land transfer market, the per capita disposable income of rural residents rose from 3026 yuan in 2004 to 18,931 yuan in 2021. With the increase in disposable income, the consumption of rural households also increases, and the per capita consumption expenditure of rural residents increases from 2185 yuan in 2004 to 15,916 yuan in 2021. In fact, the existing literature has focused on the impact of land transfers on household consumption [
9,
10], studying it from the perspectives of consumption expenditure [
11] and consumption structure [
12]. However, consumption diversity is also an important dimension reflecting the characteristics of consumption. As living standards improve, households move from pursuing food consumption to pursuing goods such as smart devices and electronic products, enhancing consumption diversity. Therefore, this paper attempts to analyze the impact of land transfers on rural residents’ household consumption from the perspective of consumption diversity and to explore the differential impact of land transfer in and out separately.
As the most frequent and important economic activity of households, consumption is directly related to sustainable and inclusive growth [
13]. Affected by COVID-19 and the increasing downward pressure on the economy, urban consumers’ demand is weak. How to release the potential of rural consumption and upgrade the consumption structure has important strategic value to stabilize the domestic demand market and maintain the high-quality development of China’s economy. A significant and growing body of research is devoted to investigating the influencing factors of consumption expenditure and consumption structure, such as income [
14,
15], income gap [
16,
17], population age structure [
18,
19], development of financial market [
20,
21] and the improvement of social security systems such as pensions, medical care, education and housing [
22,
23,
24]. Besides, as the key factor of the utility function [
25,
26], consumption is also affected by the popularity of the Internet, such as consumption scale, structure, inequality and diversity [
27,
28,
29,
30].
Though land transfer markets are rather thin [
31], an increasing incidence of land transfer activities are taking place under the background of population aging and rural-to-urban migration [
32,
33]. Land is an important resource, rational farmers will realize income improvement through the rational allocation of land and labor factors; whether this income increase can be translated into consumption is the focus of this study. As we all know, income and access to markets influence families’ consumption decisions, including purchasing frequency, consumption expenditure and consumption diversity [
13]. On the one hand, low-productive households can transfer their land to the high-productive ones to obtain land rent, and reallocate some idle labor to non-farm employment, thus increasing the family income and diversity income resources diversity [
34]. Increased income always leads to increased consumption spending and diversity. Some results show that as household income increases, the proportion of food consumption decreases [
35], while the consumption of industrial goods increases [
36]. However, the decline in agricultural activity also makes it impossible to achieve self-sufficiency in food, vegetables, etc., and has necessitated greater expenditure in these areas [
37]. Besides, other scholars find that rising incomes allow farmers to have fewer financial constraints, and more money is invested in agricultural production [
36,
38], such as equipment, seed, chemical fertilizer, and hired labor [
39]. Land transfer has a heterogeneous impact on the household consumption of farmers with different characteristics. Land transfer and social security are complementary conditions, and they should be promoted simultaneously to promote household consumption [
40]. On the other hand, land transfer changes the consumer market faced by the rural labor force in the process of rural-urban mobility. After migrant workers enter the city, their original concept of consumption will be impacted, and they will unconsciously learn and imitate the consumption habits and modes of urban residents [
41]. The comparison of the quantity and types of consumer goods improves the consumption structure of rural residents and increases the diversity of consumption [
42]. Specifically, migrant workers may increase spending on housing, health care, entertainment and so on. In addition, they may also spread the new consumption concept to their families and even to the whole village, thus prompting a broader shift in consumption.
Consumer utility depends on both the quantity and types of goods consumed. The richer the types of goods that can be consumed, the better the welfare of consumers. In rural China, with the continuous improvement of living standards and the consumption environment, consumer demand is increasingly diversified and personalized, and the diversity of household consumption is rising. From the perspective of China’s development practice, there is an upward trend among land transfer rate, income and consumption diversity. Does land transfer increase household rural consumption diversity? What are the differences between families with different income levels?
In order to answer the above questions, this study utilized representative micro-level data from China to investigate the effects by establishing the OLS estimation. The propensity score matching (PSM) method and instrumental variable (IV) method were used to alleviate the possible endogeneity problem. In summary, the marginal contribution of this study mainly has the following aspects: (1) focus on the relationship between land transfer and rural household consumption, and provide suggestions to deepen the reform of the land system in rural areas and release rural consumption potential; (2) compare the different effect between land transfer in and transfer out; (3) discuss the heterogeneous effects of land transfers on household consumption with different incomes; (4) carry out research from the perspective of consumption diversity measured by Simpson index, and enrich the consumption literature.
The remainder of this study is organized as follows.
Section 2 outlines the theoretical analysis and hypothesis.
Section 3 describes the methodology. The empirical results are presented in
Section 4. The discussion, conclusions and policy implications are given in
Section 5 and
Section 6, respectively.
5. Discussion
The healthy development of the land transfer market is of great significance for improving allocative efficiency and agricultural productivity. Unleashing the vitality of rural consumption and promoting the upgrading of consumption is also of great significance for high-quality economic development at the present stage. There have been a series of studies based on land transfer, especially related to agricultural production efficiency, labor mobility, and income growth [
34,
41,
45]. However, the existing literature has only paid little attention to the relationship between land transfer and rural household consumption [
59]. Although some scholars have tried to explore their relationship, they mainly focus on the impact of land transfer on household consumption expenditure or consumption structure [
40,
60]. Most studies show that land transfer increases the total consumption expenditure by increasing household income, reducing the proportion of basic consumption such as food, and increasing the proportion of development consumption and enjoyment consumption [
35,
40,
42]. Such studies have not yet turned their perspective to relevant studies on consumption diversity. In the background of people’s living standards gradually improving, consumption upgrading is the general trend. Behind consumption upgrading, market segmentation is becoming more and more obvious. Personalized and diversified consumption will become the mainstream of current consumption growth. Therefore, it is of practical significance to start from the perspective of consumption diversity.
Land transfer has a direct or indirect effect on household income and the consumption environment. At the same time, income and consumption environment are the key factors for households’ decision-making of consumption. Therefore, rural households should rationally allocate land resources and consider land transfer decisions to maximize the possibility of increasing family income. Besides, more attention should be paid to the improvement of the productivity of participating in the transfer of land into households, and subsidies should be provided to alleviate the pressure on household cash flow. To release the vitality of rural consumption, how to optimize the rural consumption environment is also worth thinking about.
This study further focused on the heterogeneous effects of land transfer on households with different incomes. The consumption potential of lower-income households is greater than higher-income households. In order to open up the “two veins” of consumption in rural areas and deeply stimulate the rural sinking market, it is necessary to steadily promote land transfer to increase farmers’ incomes, perfect the rural social security system and avoid one-size-fits-all policies and focus on tapping the potential of low-income households typically.