Individual and Social Optima of Rural Land Allocation by Stakeholders: A Case Study on Eco-fragile Areas of Nothern China

This paper analyses the degree of divergences among different groups of stakeholders in allocation of the four types of rural land: cultivated, range, forest and other land, and the optimal allocation from the social perspective of balancing economic and ecological benefits. The preference of stakeholders stemming from stakeholders’ different ecological and economic interests on four types of rural land was quantified by the Analytic Hierarchy Process. Weights for stakeholders in the social welfare function were derived for three social-economic scenarios. Welfare economics was employed then to determine the ‘individual’ or ‘private’ optimal allocation of each stakeholder by maximizing its utility function, and social optimal allocation by maximizing the social welfare function. A county located in the eco-fragile areas of Northern China was taken as a case to present the empirical analysis. Our results provide policy insights on how to regulate the divergences and achieve an efficient allocation of rural land