| Huang Youguang, a well-known economist, once said in 2005: "Although it is not equivalent to welfare, any value must be explained by welfare." That is to say, the only criterion to determine whether a socio-economic activity is valuable is to analyze if its social welfare is positive. Rural-urban land conversion is currently the general social economic phenomenon during the process of economic development and rural urbanization in China, which is the only source of urban construction sites. Rural-urban land conversion is positively effective as far as social and economic benefits are concerned, but its negative effect is also evident, resulting in such problems as low efficiency, rural land configuration, environmental degradation, declining income levels and loss of social welfare. Consequently, are the benefits of national economic growth brought by rural-urban land conversion sufficient to make up for welfare losses caused by its inefficiency and unfairness? That is to say, what kind of social welfare effects does this socio-economic activity bring? And how the benefits of different interest groups change in this process? These are precisely the aim of this paper.The scheme of the paper, which was displayed in more detail in the analytical table of Contents, displays as follows:After introducing the research background, this chapter put forward study issues -to reveal the social welfare effects of rural-urban land conversion from the perspective of fairness and efficiency, and to analyze the paths of achieving goals. Then it reviewed and evaluated domestic and foreign related research outcomes. At the end of this chapter, purpose of the study, methodology, technical routes, and possible innovation were summarized.Chapter 2 which included theories of welfare economics, equity and efficiency, external and collective choice, is the theoretical basis. Welfare economics, the basic viewpoints, guided to build the whole frame of the full paper. Efficiency and equity were the two main lines of the thesis. By analyzing efficiency and equity situation of China's rural-urban land conversion, reasons of land-use inefficiency and social injustice could be concluded. Externality problems and market failures of land expropriation could be analyzed by externality theory. And collective choice theory was helpful for analyzing how to achieve the effective paths of rural-urban land conversion from individual choice to collective choice.Based on the theories of welfare economics, chapter 3 advanced the social welfare objectives of rural-urban land conversion by discussing the welfare changes of various interest groups. That is, the overall social welfare level should reach or exceed the level before land conversion, while welfare levels of all interest groups should increase gradually in the process of rural-urban land conversion, and landless peasants have equal opportunities to share the increasing social welfare. By building the model of welfare distribution of rural-urban land conversion, following results are gotten: Firstly, the absolute and opposite value of social welfare is closely related with the speed of rural-urban land conversion. Secondly, governments should provide fanners and collectives fair compensation to make up the utility lose caused by land expropriation. And by analyzing the conditions of maximizing social welfare, conclusions are drawn: Governments should allocate land resource in accordance with the principle that marginal productivity of farmland is equal to that of non-agricultural land, which is the only way to balance efficiency and equity and to achieve the sustainable use of land resources.Chapter 4 analyzed welfare changes of the collective economic organizations and farmers facing land expropriation based on the field survey of urban and rural fringes in Wuhan municipality, Xiantao City, Yichang City and Jingmen City of Hubei Province. The survey focused on changes of economic income, willingness of land expropriation and price, compensation and social security situation, and so on. Results of the survey show that it is difficult for farmers, as a relatively vulnerable group, to share increased land benefit because of the low compensation standard. As a result the welfare level of most of them is gradually being reduced. Simultaneously, the amount of land requisition compensation due to village collectives is often not sufficient to maintain economic development and improve the welfare of the villagers.After conducting microscopic analysis, chapter 5 studied the social welfare effects of rural-urban land conversion from the national perspective. Firstly, it qualitatively analyzed the positive and negative social welfare effects of rural-urban land conversion and described the methods of determining welfare improvement and measuring welfare. Secondly, it simulated demand and supply curves of China's rural-urban land conversion in 12 years by using CD production function and the macro state statistics data from 1994 to 2005, and then calculated the optimal amount of land conversion guided by the principle that the marginal productive benefit of agricultural land should be equal to that of non-agricultural land. Finally, it calculated the amount of social welfare and draws a conclusion that there are inefficient loss and excessive loss of farmland conversion by comparing the optimal and actual amount of land conversion.Balanced equity and efficiency is the ideal and necessary condition of allocating land resources and achieving social welfare maximization. Therefore, Chapter 6 elaborately analyzed the current efficiency and equity situation of China's rural-urban land conversion, and explored the deep-seated reasons of low efficiency and injustice of opportunities and allocation. Consequently, in order to realize the optimal allocation of resources, it is necessary to observe the principle of maximizing social welfare, to integrate market system, government's macro-control, and public participation mechanism, and to balance equity and efficiency.The last chapter, i.e. chapter 7, summarized the full dissertation and advances inadequate problems and prospect of this research. Finally, relevant policy recommendations about land market system, income distribution mechanism and social security mechanism of landless farmers were put forward based on collective choice theory.The possible new ideas of this dissertation are as follows:â‘ It put forward the overall object of rural-urban land conversion which is to balance equity and efficiency and to achieve the maximization of social welfare;â‘¡It builded model of welfare distribution and social welfare function to analyze situations of balancing benefits between different interest groups and maximizing social welfare, which provides a useful reference to similar macroeconomic researches;â‘¢It examined the phenomenon of market failure, government failure, inefficiency and unfair allocation by empirical studying on the current situation of land conversion's equity and efficiency from micro and macro viewpoints based on large amount of first-hand information and national statistic data, and then puts forward relative policy recommendations.
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