| Abstract | How does land adjustment affect the development of rural land rental market is the central concern of this paper. Most previous studies emphasize the transaction quantity alone, however, that is not the whole picture. This paper combines the dual perspectives of both transaction quantity and quality. By introducing a trading model, the following theoretical propositions are derived. First, land adjustment prompts the households to get non-farm jobs and thus increases the supply in land rental market. In suburban areas where the supply elasticity is less than the demand elasticity, this will lead to a plus in transaction quantity. Second, land adjustment plays a negative role in promoting a more qualified land rental market, as it kills the incentives to make contract and shortens the lease term, which results in a significant decrease in households’ land investment. Utilizing first-hand survey data from Jiangsu, Shandong, Shaanxi and Zhejiang, 2000, 2001 and 2009, this paper validates the propositions above. |