Abstract: Taking “relative price change of land elements-benefit game-reform on the three rights division of rural housing land” as the main line, this study analyzes the institutional economics of the reform of the three rights division in Changyuan city, Henan province, by means of theoretical analysis and literature review. It is found that the change of relative price of land factors increases the external profit, which also becomes the practical demand of the reform of the separation of three rights division. The reform of the three rights division is conducive to the development of local economy, the improvement of farmers’ living environment, and the strength of collective economic organizations. It can also realize the internal internalization of external profits among farmers, governments and collective economic organizations through benefit game, so as to achieve a win-win situation. Therefore, we should respect the change trend of relative price of homestead elements, recognize the value attributes of homestead assets, construct a value-added revenue sharing mechanism agreed by all stakeholders, and manifest the institutional performance.

Key words: rural housing land, three rights division, institutional economics, Changyuan city