Residents’ Selection Behavior of Compensation Schemes for Construction Land Reduction: Empirical Evidence from Questionnaires in Shanghai, China

Construction land reduction (CLR) was implemented in China to improve the efficiency of construction land use. CLR also limited the development of net reduction areas of CLR. By analyzing the Task-Quota-Financial-Benefit flow of CLR, this paper proposes three typical compensation schemes and uses the multivariate probit model to study residents’ selection behavior for these schemes. It is found that (1) in order to compensate for the losses caused by CLR to the reduced direct subjects, there can be three types of possible schemes: direct economic compensation (Scheme I), in situ (Scheme II) and off-site (Scheme III) enhancement of development capacity. (2) The more reasonable the compensation standard, the greater the employment pressure in the township and the greater the township’s location disadvantage, which is why more residents prefer Scheme III. (3) The higher their family income and their family support pressure, the more they prefer Scheme III. (4) At this stage, there is no significant difference in the choice of compensation schemes between cadres and non-cadres. (5) The net planning reduction area prefers Scheme I, while other areas prefer Scheme II. The conclusions may provide insight into the demand for more reasonable compensation policies to ensure the sustainability of CLR.