https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5921462

This article estimates factor prices in pre-Opium War China. Provincial interest rates are inferred from seasonal fluctuations in grain prices, which is used to convert farmland value based on land contracts into land rents. Assuming a Cobb-Douglas production function with a land share of 0.5, twice the land rents equals grain yields. Estimated interest rates and land rents trended downwards in the eighteenth century, which, given the undisputed fact of growing population, predicts a decline in workers’ earnings consistent with available wage evidence. Falling factor prices imply that eighteenth century China experienced income and total factor productivity decline, rather than achieving Smithian growth or traversing an involutionary path. Sectoral TFP duals indicate that the productivity failure was not sector-specific but generalized, suggesting that the Qing misperformance was policy-induced. 

Keywords: China, Eighteenth Century, Land Yield, Interest Rates, Land Prices

JEL Classification: N1, N5, N95, O47, Q1