Working Paper: CEPR ID: DP16405
Authors: Marco Fabbri; Maria Bigoni
Abstract: We study how distributional preferences are affected by a major property rights reform that transformed informal use-rights over land traditionally characterizing rural Beninese villages in a system akin to private ownership. The design combines the randomized control-trial implementation of the reform across villages with lab-in-the-field experiments eliciting villagers' distributional choices -- both when luck is the source of situational inequality and when an unequal distribution is originated by merit considerations. Results show that reforming allocation rules in the direction of impersonal market-alike institutions increases participants’ acceptance of inequality determined by luck, while leaving participants' tolerance for inequality generated by merit unaffected.
Keywords: fairness; institutional change; lab-in-the-field experiment; land tenure reform; land titling
JEL Codes: D31; C93; D01
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Formal property rights reform (P14) | Increased acceptance of inequality determined by luck (D63) |
| Formal property rights reform (P14) | Redistribution decisions unaffected when inequality arises from merit (D63) |
| Formal property rights reform (P14) | Differential impacts based on socio-economic conditions (I14) |