Will transferable development rights (TDR) increase regional economic imbalance? - A quota transaction case of cultivated land conversion and reclamation in Guangxi, China

As a policy tool to coordinate land use among regions, the practice of transferable development rights (TDR) is widely used all over the world. However, there are still many problems in the practical application of TDR. Therefore, based on the real estate and land market transaction data of Chongzuo and Liuzhou in 2016, this paper attempts to establish a prediction model of the development profit of supplementary cultivated land quota transactions. The paper also focuses on an analysis of the impact on the development profit of the areas that are sending and those that are receiving after a supplementary cultivated land quota transaction. The results show that: (1) since the income per unit of land development in the receiving area is higher than in the sending area, this leads to a greater tendency of land development in high income regions. If the goal is to maximize profit from land development, the government will prefer to restrict the sending area's land development rights. (2) Because the government is dominant in terms of setting land prices, the transaction price is far lower than the equilibrium price. Transfers in which the producer surplus becomes the consumer surplus can cause greater development profits to flow to the economically developed regions. However, these transfers will restrain the income of the economically underdeveloped regions, and even weaken their potential for later development. This effectively proves that the implementation of TDR will increase regional inequality, ensuring the poor get poorer and the rich get richer. This indicates that improving the market transaction mechanism and setting a reasonable transaction price will help to improve the TDR policy, narrow the gap between the rich and the poor, and promote TDR's ability to play a greater role in the coordinated development of regional economies.