Working Paper: NBER ID: w27479
Authors: Christian Dippel; Dustin Frye; Bryan Leonard
Abstract: Governments often place restrictions on the transferability of property rights to protect property owners from making “mistakes” such as selling their property under value. However, these restrictions entail costs: they reduce the property’s value as collateral in credit markets, limit owners’ ability and incentives to invest in the land, and create various transaction costs that constrain optimal land use. We investigate these costs over the long run, using a natural experiment whereby millions of acres of reservation lands were allotted to Native American households under differing land-titles between 1887–1934. We compare non-transferable land plots to neighboring plots held with full property rights, using fine-grained satellite imagery to study differences in land development and agricultural activity from 1974–today.
Keywords: Property Rights; Land Allotment; Native American Reservations; Economic Development; Transferability
JEL Codes: J15; N51; Q15
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| nontransferable allotted trust status (H24) | access to credit (G21) |
| nontransferable allotted trust status (H24) | land assembly (Q15) |
| nontransferable allotted trust status (H24) | competing ownership claims (P14) |
| greater exposure to fractionation (Y50) | land utilization (R14) |
| expanded banking access (G21) | land utilization gap (R14) |
| nontransferable allotted trust status (H24) | land utilization (R14) |
| nontransferable allotted trust status (H24) | agricultural cultivation (Q10) |
| nontransferable allotted trust status (H24) | land development (R52) |