The Chinese central government has been trying through the 1980s and 1990s to create and facilitate free markets for agricultural goods in urban areas. Chapter One examines the food markets in China, in 1988, after the first big agrarian reforms, using tobit analysis of household behavior. The paper looks at the household consumption patterns of 7998 households, spread through 10 provinces of urban China, for the reference year 1988, for wheat, rice, oil, pork, and sugar. Tobit analysis reveals that market infrastructure, captured by free market prices, state shop prices, and quota and trade restrictions, has a significant impact on market participation by the urban household.

Chapter Two tests the demand for land reconfiguration using 7998 households spread throughout rural China for the reference year 1995. Recognizing that renting in land and renting out land are both valid possibilities, bivariate Tobit analysis supports the predictions that household demographics like household size, and composition, and household income, from agricultural and non-agricultural sources, plays an important part in how much land a household will rent in or out.

Conventional literature often assumes that formal credit is preferable to informal credit. This fails to acknowledge that households are heterogeneous:while some households may not have any demand for formal or informal loans, some households may have demand for both.

Chapter Three analyzes a portion of household credit decisions in rural China using bivariate models in order to consider formal and informal borrowing. This study also uses the previous data set of 7998 households spread throughout rural China for the reference year 1995. This study finds that households rely on informal ties for financial assistance for reasons different than a household that is seeking credit through more organized mechanisms. The household's reputation, and its maintenance, seems to be an important factor in the household's decision to borrow.