Working Paper: NBER ID: w27839
Authors: Simeon Djankov; Edward L. Glaeser; Valeria Perotti; Andrei Shleifer
Abstract: How do the different elements in the standard bundle of property rights – such as the right of possession or the right of transfer – differentially impact outcomes, such as urban development? This paper incorporates insecure property rights into a standard model of urban land prices and density, and makes predictions about investment in land and property, informality, and the efficiency of land use. Our empirical analysis links data on institutions related to land titling and transfer with multiple urban outcomes, from 190 countries. The evidence is generally consistent with the model’s predictions, and more broadly with the Demsetz’s (1967) approach to property rights institutions. Indeed, we document world-wide improvements in the quality of institutions facilitating property transfer over time.
Keywords: property rights; urban development; land titling; economic activity
JEL Codes: O17; O18; O43; R14; R21
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Weak possession rights (P14) | Higher urban density (R23) |
| Weak possession rights (P14) | Poorer housing quality (R28) |
| Higher urban density (R23) | Higher percentage of urban population living in slums (R23) |
| Weak transfer rights (P14) | Spatial mismatches between residences and workplaces (R23) |
| Spatial mismatches between residences and workplaces (R23) | Increased traffic congestion (R48) |
| Number of procedures required to transfer property (H13) | Traffic congestion levels (L91) |
| Right to transfer property (P14) | Financial development (O16) |
| Security of title and transfer procedures (H13) | Housing loan penetration (G51) |