Property Rights and Urban Development: Initial Title Quality Matters Even When it No Longer Matters

    Authors

    I. A. Navarro;G. K. Turnbull

    Comments

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    Abbreviated Journal Title

    J. Real Estate Financ. Econ.

    Keywords

    Squatting; Property rights; Property title; Housing quality; DEVELOPING-COUNTRIES; RENTAL EXTERNALITY; Business, Finance; Economics; Urban Studies

    Abstract

    Formal title to property allows owners to borrow for investing in improvements. Title legalization laws, however, appear to yield only modest increases in housing quality in developing countries. We offer a simple model in which squatters initially balance initial investment in low quality structures to reduce the risk of eviction against the future effect of increasing the marginal cost of improving quality. The effort to secure initial possession thereby creates a legacy effect, reducing subsequent investments in housing quality. Empirical tests using Bolivian data yield results consistent with the legacy theory: initial title risk suppresses long run housing quality.

    Journal Title

    Journal of Real Estate Finance and Economics

    Volume

    49

    Issue/Number

    1

    Publication Date

    1-1-2014

    Document Type

    Article

    Language

    English

    First Page

    1

    Last Page

    22

    WOS Identifier

    WOS:000336392900001

    ISSN

    0895-5638

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