The misallocation of land resources in China harms the development of both rural and urban areas. Rural areas suffer from the surplus supply of construction land quota when its shortage emerges in urban areas. To address this allocative inefficiency and make villages enjoy the benefit of urban development in China, the Land Coupon policy, similar to the U.S.’s Transferable Land Development Rights programs, was implemented in Chongqing province in 2008. This paper estimates the effects of the Land Coupon approach on spatial income inequalities, particularly the urban-rural income ratio, applying the newly developed MASC estimator combining the matching and synthetic control estimators through model averaging. The evidence shows that the policy has indeed accelerated the decrease of the province-level urban-rural income gap. This paper discusses different implementations of the MASC method with the variations of pre-treatment covariates, different weights in the matching criterion, and how the cross-validation is done.




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