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Heterogeneous Effects of Property Rights on Housing Investment in Urban Peru

Author

Listed:
  • Oswaldo Molina

    (Universidad del Pacifíco)

  • Mans Söderbom

    (University of Gothenburg)

Abstract

Empirical results reported by Field (2005) indicate that improved property rights tend to raise average housing investment among poor urban households in Peru. We investigate if this effect varies across households with differing incomes, how it evolves over time, and whether heterogeneous expectations about future tenure security matter for the estimated effects. The results indicate that the investment response among the poorest households represented by our sample is weak and not significant. Among households with higher incomes, the response is quantitatively large and statistically highly significant. The results further indicate that it may take several years until the response of long-run investment to reformed property rights can be found in the data. Finally, even though expectation of treatment affects the behaviour of non-treated households, the treatment effect changes only slightly when we take into account expectations in our previous estimations, indicating that our results are robust to this problem.

Suggested Citation

  • Oswaldo Molina & Mans Söderbom, 2018. "Heterogeneous Effects of Property Rights on Housing Investment in Urban Peru," Working Papers 119, Peruvian Economic Association.
    • Handle: RePEc:apc:wpaper:119
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    References listed on IDEAS

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    1. Italo A. Gutierrez & Oswaldo Molina, 2020. "Reverting to Informality: Unregistered Property Transactions and the Erosion of the Titling Reform in Peru," Economic Development and Cultural Change, University of Chicago Press, vol. 69(1), pages 317-334.
    2. Simon Johnson & John McMillan & Christopher Woodruff, 2002. "Property Rights and Finance," American Economic Review, American Economic Association, vol. 92(5), pages 1335-1356, December.
    3. Galiani, Sebastian & Schargrodsky, Ernesto, 2010. "Property rights for the poor: Effects of land titling," Journal of Public Economics, Elsevier, vol. 94(9-10), pages 700-729, October.
    4. Orazio P. Attanasio & Costas Meghir & Ana Santiago, 2012. "Education Choices in Mexico: Using a Structural Model and a Randomized Experiment to Evaluate PROGRESA," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 79(1), pages 37-66.
    5. Abhijit V. Banerjee & Esther Duflo, 2009. "The Experimental Approach to Development Economics," Annual Review of Economics, Annual Reviews, vol. 1(1), pages 151-178, May.
    6. Malani, Anup & Reif, Julian, 2015. "Interpreting pre-trends as anticipation: Impact on estimated treatment effects from tort reform," Journal of Public Economics, Elsevier, vol. 124(C), pages 1-17.
    7. Martin Ravallion, 2009. "Evaluating three stylised interventions," Journal of Development Effectiveness, Taylor & Francis Journals, vol. 1(3), pages 227-236.
    8. Fernando M. Aragon & Oswaldo Molina & Ingo W. Outes-Leon, 2017. "Can public policies change risk preferences? The effect of property titling on risk aversion," Discussion Papers dp17-09, Department of Economics, Simon Fraser University.
    9. Gutierrez, Italo A. & Molina, Oswaldo, 2016. "Reverting to Informality: Unregistered Property Transactions and the Erosion of the Titling Reform in Peru," Working Papers 1156-1, RAND Corporation.
    10. Erica Field, 2005. "Property Rights and Investment in Urban Slums," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 279-290, 04/05.
    11. Vogl, Tom S., 2007. "Urban land rights and child nutritional status in Peru, 2004," Economics & Human Biology, Elsevier, vol. 5(2), pages 302-321, July.
    12. Field, Erica Marie, 2005. "Property Rights and Investment in Urban Slums," Scholarly Articles 3634150, Harvard University Department of Economics.
    13. Besley, Timothy, 1995. "Property Rights and Investment Incentives: Theory and Evidence from Ghana," Journal of Political Economy, University of Chicago Press, vol. 103(5), pages 903-937, October.
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    Cited by:

    1. Italo A. Gutierrez & Oswaldo Molina, 2020. "Reverting to Informality: Unregistered Property Transactions and the Erosion of the Titling Reform in Peru," Economic Development and Cultural Change, University of Chicago Press, vol. 69(1), pages 317-334.
    2. Fernando M. Aragon & Oswaldo Molina & Ingo W. Outes-Leon, 2017. "Can public policies change risk preferences? The effect of property titling on risk aversion," Discussion Papers dp17-09, Department of Economics, Simon Fraser University.

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    More about this item

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • P26 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Property Rights

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