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Effects of Land Titling
Abstract
The empirical evaluation of the effect of land property rights typically suffers from selection problems. The allocation of property rights across households is usually not random but based on wealth, family characteristics, political clientelism, or other mechanisms built on differences between the groups that acquire property rights and the groups that do not. In this paper, we address this selection concern exploiting a natural experiment in the allocation of property rights. Twenty years ago, a homogenous group of squatters occupied a piece of privately owned land in a suburban area of Buenos Aires, Argentina. When the Congress passed an expropriation law transferring the land from the former owners to the squatters, some of the former owners surrendered the land (and received a compensation), while others decide to sue in the slow Argentine courts. These different decisions by the former owners generated an allocation of property rights that is exogenous to the characteristics of the squatters. We take advantage of this natural experiment to evaluate the effect of the allocation of urban land property rights. Our preliminary results show significant effects on housing investment, household size, and school attrition. Contradicting De Soto's hypotheses, we found non- significant effects on labor income and access to credit markets.
... ng on the parcels without having titles. Thus, by comparing the groups that received and did not receive land titles, it is possible to simulate a one-stage randomized experiment. Because randomization resolves the selection problem, this natural experiment makes it possible to identify the effects of land titling using cross-sectional information. Galiani and Schargrodsky (2004) show, using observable variables, that the hypothesis that this natural experiment assigned land titles randomly among the squatters is not statistically rejected. That paper first compares average parcel characteristics for the group that was offered property rights and the group that was not. The three available variables are parcel s ...
... The null hypothesis of absence of differences in these parcel characteristics is not rejected at conventional levels of statistical significance. Second, Additional details on the description of this natural experiment are available in Galiani and Schargrodsky (2004). the paper tests the null hypotheses of absence of differences between these two groups for a large set of pre-treatment household characteristics. ...
... A natural experiment in the allocation of land titles across squatters in a poor suburban area of Buenos Aires, Argentina is exploited in order to evaluate the impact of property rights. In our previous work (Galiani and Schargrodsky, 2004), we found large effects of land titling on investment in housing improvements. A potential concern raised by those results is that the provision of appropriate property rights may increase the expected return to investment in physical vis-à-vis human capital, leading poor families to sacrifice the health of their children to improve housing conditions. ...
This paper examines the impact of urban land titling on child health. We hypothesize that land titling may translate into positive effects on health through its impact on housing investments and household structure. To address selection concerns, we take advantage of a natural experiment of land occupation in a suburban area of Buenos Aires, Argentina, that ensures that the allocation of property rights is exogenous to the characteristics of the squatters. Our results show that in the titled parcels children enjoy better weight-for-height scores (but similar height-for-age scores), and teenage girls have lower pregnancy rates than those in untitled parcels.
... Previous papers have dealt with the relationship of property titles to varied outcomes such as fertility ( Field 2003 ) , housing decisions ( Galiani and Schargrodsky 2004 ) , and education ( Galiani and Schargrodsky 2007 ) . Given that these were some of the controls I was planning to use , there is a need to look for pre - treatment proxies . ...
... Previous papers have dealt with the relationship of property titles to varied outcomes such as fertility (Field 2003), housing decisions (Galiani and Schargrodsky 2004), and education (Galiani and Schargrodsky 2007). Given that these were some of the controls I was planning to use, there is a need to look for pre-treatment proxies. ...
This paper analyzes the relationship between land property rights and household labor allocation. It posits that land titling has two opposite effects on labor decisions. On one hand, enhancement of tenure security should lead to reductions in guarding requirements and to increases in the hours that households spend off their land (Field effect). On the other hand, decreases in the risk of expropriation should lead to higher parcel-attached investments and to higher labor productivity related to land (productivity effect). To investigate this hypothesis, a massive land titling program in rural Peru (the Special Program of Land Titling, or PETT) is analyzed. Propensity score matching estimations suggest that the productivity effect is much larger than the Field effect, leading to overall increases in household labor allocations to agricultural self-employed activities. These estimations are robust to different specifications within a cross-section and a four-round panel dataset.
... Moreover, our results are robust to control for differences in the timing of the treatment: if we include two different dummies for the early treated (1989-91) and the late treated (1997-98) parcels, we cannot reject the equality of the coefficients on these dummies. 14 Galiani and Schargrodsky (2004) show significant effects of land titling on housing investments and child education in this population, but no differences in their performance in the labor and credit markets. variables are potentially endogenous, they were excluded as controls from Table IV.b, but these exclusions lead us to wonder if there is still variation in beliefs that is explained by property rights after the effect of education, income and wealth is taken into account. ...
... Moreover, our results are robust to control for differences in the timing of the treatment: if we include two different dummies for the early treated (1989-91) and the late treated (1997-98) parcels, we cannot reject the equality of the coefficients on these dummies. 14 Galiani and Schargrodsky (2004) show significant effects of land titling on housing investments and child education in this population, but no differences in their performance in the labor and credit markets. variables are potentially endogenous, they were excluded as controls from Table IV.b, but these exclusions lead us to wonder if there is still variation in beliefs that is explained by property rights after the effect of education, income and wealth is taken into account.Table V presents the results after including Income (the total household income divided by the number of household members), Education (years of education of the household head) and House Value (total square meters of the construction). ...
The possession of property rights may change the beliefs that people hold. We study this hypothesis using a natural experiment from a squatter settlement in the outskirts of Buenos Aires ensuring that the allocation of property rights is exogenous to the characteristics of the squatters. There are significant differences in the beliefs that squatters with and without property rights declare to hold. Property rights make beliefs closer to those that favor the workings of a free market. Examples include materialist and individualist beliefs (such as the belief that money is important for happiness or the belief that one can be successful without the support of a large group). The effects appear large. The value of a (generated) index of pro-market beliefs for squatters without property rights is 78% of that of the general Buenos Aires population. The value for squatters that receive property rights is 98% of that of the general population. In other words, giving property rights to squatters causes a change in their beliefs that makes them indistinguishable from those of the general population, in spite of the large differences in the lives they lead. Our experiment is less informative as to the precise way property rights change beliefs, although there is suggestive evidence of a behavioral channel. JEL: P16, E62. for helpful discussions.
... Endogeneity of titling is one of the major methodological challenges for empirical studies. Galiani and Schargrodsky (2003) argue that "[i]n most historical experiences, the allocation of property rights across families is not random but based on wealth, family characteristics, political clientelism, or other selective mechanisms" (p.3). Therefore, studies that ignore land titling endogeneity tend to have biased estimates of the effects on credit due to the selection bias in the titled sample. ...
... Thus, we are overestimating the effect of titling when we compare titled and untitled groups. In essence, this spurious correlation is whatGaliani et al. (2003) refer to as endogeneity. Land titling is endogenous to credit access in the sense that it is also determined in the model by other unidentified variables such as household wealth which also affect credit. ...
This paper explains how the effects of land titling are in part dependant to the decision to acquire titles. Land titling programs assign secure property rights on land assets. One of their potential effects is an increase in credit—the "credit effect"—as titled assets can be used as collateral to obtain loans. Empirical studies have shown that the credit effect has not taken place in many countries where land titling programs have been implemented. Most studies, however, fail to ask whether individuals acquire titles to increase their credit in the first place. I develop a theoretical framework based on the field of New Institutional Economics to explain why it is important to include a demand analysis when examining the effects of land titling. I apply this framework to the case study of the ejido in Mexico. The evidence from Mexico shows that the credit effect is unlikely to take place because individuals acquire titles to sell their land for urbanization rather than expand credit. The main implication of this study is that policymakers must include a demand analysis when considering the possible effects of land titling.
... No hay diferencias en cuanto al acceso al crédito formal entre 1.800 familias legalizadas entre 1989 y 1998 y otro grupo de familias aun no regularizadas. Las familias regularizadas siguen accediendo a crédito informal a través de parientes, colegas, vecinos y amigos (Galiani y Schargrodsky, 2004). solicitando la implementación de una política de formalización o de registro de sus propiedades (PDPU, 2002). ...
Resumo
Este artigo mostra as dificuldades de acesso ao solo por parte da população urbana pobre da América Latina e os resultados da implementação de Programas de regularização, que procuram solucionar a situação da população que mora de maneira informal nas cidades e áreas metropolitanas. Tais Programas têm surgido a partir da existência da irregularidade/ilegalidade/informalidade nas formas de ocupação do solo e de construção do habitat urbano. Compõem o artigo uma introdução, um capítulo sobre a informalidade urbana, outro sobre as políticas de regularização, tanto de propriedades quanto de melhoramento de bairros e, finalmente, reflexões sobre a implementação dessas políticas e seu impacto sobre a população objeto de sua aplicação.
Palavras-chave: informalidade urbana; regularização urbana; legalização dominial; melhoramento de bairros.
Abstract: This article discusses the difficulties of land access of poor urban population in Latin America and the results of the implementation of regulation Programs which tend to solve the situation of the population that inhabits informally in the cities and Latin American metropolitan areas. These Programs have started from the existence of irregularity/ illegality/ informality on land occupation and the construction of the urban habitat. The article consists of an introduction, a section on the urban informal act, other about the regulation policies, as per tenant purposes as improvement of neighborhoods and finally reflections on the implementation of such policies and the impacts on the population that are objective of them.
Keywords: urban informality; urban regulation; legalization; improvement of neighborhoods.
... This example from Thailand highlights the relevance of the design of property rights reforms. The literature on property rights formalized in Besley (1995), has typically found large private benefits from tenancy reforms (Banerjee et al., 2002) and from formal titling programs in measures such as investment on the land (Galiani and Schargrodsky, 2004), access to credit (Feder et al., 1988a) and labor supply (Field, 2003; Do and Iyer, 2004). The policy we study, not only resulted in small private benefits (Feder et al., 1988a) but it actually created large social costs by distorting the land rental market. ...
In the 1980s, the Thai government tried to legalize squatters living in certain geographical areas by issuing special titles that allowed for cultivation but restricted the sale and rental of the land. Using data from 2,874 farming households collected in 1997 and a difierences-in-difierences empirical strategy, we compare the difier- ential rental rates between secured and unsecured plots in reform and non-reform areas. In reform areas, households are more likely to lease secured plots and culti- vate unsecured plots. In addition, using land rental rates and prices, we estimate a 6 percent premium due to expropriation risk. In other areas, however, land rights do not in∞uence leasing decisions and no risk premium is found. These results indicate that this property rights reform distorted the land rental market by triggering a sense of insecurity among owners of undocumented land. Since the program tar- geted more developed areas, our results may underestimate the true negative impact of the reform.
... Although the specific example is from Thailand, the findings are important because they shed light into the relevance of the timing and the design of property rights reforms. The literature on formal land titling formalized in Besley (1995), has typically found large private benefits in measures, such as investment on the land (Banerjee et al., 2002; Galiani and Schargrodsky, 2004), access to credit (Feder et al., 1988a; Do and Iyer, 2004) and labor supply (Field, 2003). The policy we study, not only resulted in small private benefits (Feder et al., 1988b) but it actually created large social costs by distorting the land rental market. ...
In the 1980s the Thai government tried to legalize squatters by issuing special titles that restricted the sale and rental of the land. Using data from 2,874 farming households collected in 1997, the author finds that in places where these government titles where issued, leased plots are more likely to be titled than those that are self-cultivated. For these areas, he uses a model to estimate a 6 percent risk premium in the rental rate for untitled plots. In other areas, however, land rights play no role in the decision to lease land and the rental rate of untitled plots does not include a risk premium. The results indicate that this policy distorted the land rental market by triggering a sense of insecurity among landowners.
O artigo analisa a relação entre o processo de urbanização nacional e o direito de propriedade relacionados à moradia, com base nos estudos de Douglass North, da Nova Economia Institucional (NEI). A metodologia é caracterizada por um estudo exploratório a partir de uma revisão de literatura referente ao processo de urbanização brasileiro e a abordagem sobre do direito de propriedade sob a perspectiva da teoria econômica institucionalista. Os resultados teóricos e empíricos acumulados pela NEI oferecem um instrumental importante para uma melhor compreensão das várias interfaces entre o sistema econômico e as instituições legais e jurídicas que condicionam as atividades e transações econômicas relacionadas à moradia. As ideias de North mostraram-se adequadas na discussão do tema, haja visto que se o direito de propriedade for mais bem definido, atribuído e garantido nessas comunidades, menores serão os custos de transação e, conseqüentemente, maior será o valor do ativo e da renda do proprietário deste.
En este texto se analizan las causas de la irregularidad urbana en las ciudades latinoamericanas, las políticas que se han implementado para la regularización de tierras y el efecto de esas políticas sobre el tema de la informalidad urbana, la pobreza y el mercado del suelo. Los problemas de irregularidad/ilegalidad/informalidad se presentan en Latinoamérica en diversas formas y dimensiones según el país y los niveles de desarrollo. Desde 1960, pero con más vehemencia desde la década de los años ochenta, los gobiernos, unos en mayor medida que otros, han puesto en marcha normas y programas de regularización del suelo. Veinticinco años de normas y programas permiten revisar los resultados cuantitativos y cualitativos de los programas, con lo que se logra una perspectiva general de las condiciones actuales y se identifican las barreras que impiden superar en forma definitiva la irregularidad/ilegalidad/ilegalidad urbana.
This paper analyzes titling institutions and the regulation of supporting conveyancing services. After examining the tradeoff of enforcement benefits and consent costs posed by property rights, it explains how different public titling systems (privacy, recording and registration) try to solve this tradeoff, and what the consequences are for the nature and regulation of private conveyancing services. The paper ends with a discussion of some empirical issues and data which are useful for comparing, designing and managing titling and conveyancing systems.
While Vietnam's reforms provided some of the weakest legal private property rights amongst the transitions countries, cities like Ho Chi Minh City have booming domestic real estate markets. Interestingly, while most properties in 2001 did not have legal title, those on the market did advertise a variety of property rights claims. Employing a hedonic price model to analyse the pattern of prices at which sellers offer properties in Ho Chi Minh City, this study examines how this market values property rights. The findings show that multiple forms of property rights, enforced by highly decentralized state institutions, are operational in this market. Furthermore, legal title itself is not the most valuable form of property right. These findings suggest that the value of property rights emanates from where it is enforced within the particular institutional context of a market. Copyright (c) The European Bank for Reconstruction and Development, 2004.
An important challenge in the crime literature is to isolate causal effects of police on crime. Following a terrorist attack on the main Jewish center in Buenos Aires, Argentina, in July 1994, all Jewish institutions received police protection. Thus, this hideous event induced a geographical allocation of police forces that can be presumed exogenous in a crime regression. Using data on the location of car thefts before and after the attack, we find a large deterrent effect of observable police on crime. The effect is local, with no appreciable impact outside the narrow area in which the police are deployed.
Property rights reform is typically hypothesized to boost investment through investment demand and credit supply effects. Yet when the credit supply effect is muted, property rights reform would be expected to induce liquidity-constrained farms to reduce investment in movable capital even as they increase investment in attached capital. This expectation is corroborated by econometric analysis of panel data from Paraguay. While all farmers experience a positive investment demand effect, liquidity-constrained producers correspondingly reduce their demand for movable capital. Given an estimated pattern of wealth-biased liquidity constraints, property rights reform will get institutions "right" for only wealthier producers. Copyright 2003 American Agricultural Economics Association.
Las Tomas de Tierras en la Zona Sur del Gran Buenos Aires Un Ejercicio de Formación de Poder en el Campo Popular
- I Izaguirre
- Aristizabal
Izaguirre I, Aristizabal Z (1988). Las Tomas de Tierras en la Zona Sur del Gran Buenos Aires. Un Ejercicio de Formación de Poder en el Campo Popular. Buenos Aires: Centro Editor de América Latina.