OVERVIEW OF RESEARCH ON EXTERNALITIES OF RURAL-URBAN LAND CONVERSION

Externality is essential element to decision-making of rural-urban land conversion and land allocation.This paper tries to systematically review literatures on externality of rural-urban land conversion with inductive method.Research progress of the topic was introduced in terms of measurement of externality and land allocation optimization.Meanwhile,some controversial issues were analyzed. Overview on measurement of externality is one aspect of the article.At first,we summarized basic theory of externality measurement and applications of measurement methods.Contingent valuation method,hedonic price method,travel cost method and choice experiment method which are proposed based on consumer surplus theory were introduced and analyzed comparatively from their respective advantages.The applications of above methods in different countries or regions were concluded when influence extent of externalities and additivity of utility function were emphasized.Secondly,since identification of the influence extent is essential process in externality measurement,Loomis(2000),Lewis(2007) and Chen(1996)'s researches illustrated methods of extent identification and some results of externality measurement in parcel level.Thirdly,we analyzed the phenomenon that embedding effect caused linear utility function having error in part-whole externality measurement,while solutions included making the assumption of quadratic function or using choice modeling methods.Still,there are flaws in above method to solve the error of embedding effect according to our analysis,which are worthy of attention for Chinese researchers. The other content of the overview is land allocation optimization based on the results of externality measurement.Firstly,due to context difference,we found that the assumption of agents in land allocation model should be improved with Chinese situation because decision makers of rural-urban land conversion in China were local officials instead of private persons.Even there were some literatures having noticed the problem,realistic policies of rural-urban land conversion in China had not been explained thoroughly.Secondly,land heterogeneity was common in reality but it was often ignored by models of rural-urban land allocation with externality.Therefore,related studies were summed up,and random probability function,heterogeneous matrix and multinomial logit model could be alternatives.At last,we showed the important role of the endogenous of externalities in rural-urban land allocation with externalities.On the basis of previous studies,endogenous of externality could influence decision-making of rural-urban land conversion,which meant that interaction between amenity and market need to be analyzed in theoretical and empirical study. As a conclusion,our analysis demonstrated that notable issues in externality study of rural-urban land conversion included identification of the influence extent,additivity of utility function,assumption of agent in land allocation model,land heterogeneity and endogenous of externalities.By the end of the article,the development of prospect is projected from three sides.One is that the process of externality measurement in rural-urban land conversion needs to be designed completely.Secondly,researches on rural-urban land conversion under Chinese context should improve models with the assumption that decision-makers of land conversion are local officials.Lastly,spatial element has been presented as important factor in related studies,but rural-urban land allocation with spatial factor faces challenges,it is also the future direction.