The reform allowing collective operating construction land to enter the market aims to activate rural land assets，realize land value，and promote farmers’ income，playing a crucial role in advancing rural revitalization and common prosperity.Using three waves of household panel data from the the China Rural Household Panel Survey conducted by Zhejiang University in 2015，2017，and 2019，the paper employs the PSM-DID approach to explore the impact of the reform on the income and expenditure of rural households.The research findings indicate that the reform significantly increased household income and expenditures in pilot areas，with respective growth rates of 20.2% and 3.4%.These findings remain robust under parallel trend tests，relaxed matching sample restrictions，alternative matching methods，and random assignment of pilot counties.Mechanism analysis suggests that the reform indirectly boosts household income by stimulating the development of collective economic organizations.Examining the structure of household income and expenditure，the reform primarily enhances agricultural income，but has no significant effect on industrial and commercial income，wage income，property income，and transfer income.It also significantly increases household consumption and agricultural production expenditure，but not transfer expenditure.Accordingly，it is recommended to standardize and improve procedures for market entry of collective operating construction land and the mechanisms for profit distribution.This will foster the development of new-type rural collective economic organizations.By effectively converting land-related revenues into endogenous drivers for rural revitalization，it expand diversified income channels for farmers，thereby continuously enhancing their welfare.