The Impact of Rural Centralized Residence on Land Transfer: Evidence from Sichuan, China

Exploring the impact of rural centralized residence (RCR) policies on land transfer behavior is crucial for promoting scaled agricultural operations in rural China. However, empirical scrutiny of RCR’s effects on land transfer remains limited, as existing evaluations focus primarily on income and social outcomes. Using primary survey data from 2860 rural households in Sichuan Province, this study employs an instrumental variable (IV) approach to examine the causal effect of RCR on household land transfer decisions. This study contributes by providing the first systematic evaluation of RCR’s impact on land transfer, distinguishing between opportunity-enhancing and pressure-based mechanisms while addressing endogeneity through a novel IV strategy. The results indicate that RCR significantly increases the probability of land transfer-out. Mechanism analysis reveals that this effect is driven by increased non-agricultural employment, enhanced internet usage, and increased agricultural production costs. Heterogeneity analysis further shows that the impact is more pronounced among small-scale farmers, households with highly fragmented land, female-headed households and elderly headed households. These findings suggest that RCR should be designed to promote voluntary land transfer through opportunity-enhancing mechanisms rather than pressure-based ones, offering significant implications for rural revitalization and food security.