Advanced Search
MyIDEAS: Login

Impact of Land Titles over Rural Households

Contents:

Author Info

  • Máximo Torero

    ()
    (Office of Evaluation and Oversight at the Interamerican Development Bank, and International Food Policy Research and E. Field Harvard University.)

  • Erica Field

    ()
    (Office of Evaluation and Oversight at the Interamerican Development Bank.)

Abstract

Property rights are seen as a prerequisite for economic development and poverty reduction essentially because improvements in land rights are assumed to reduce the risk expropriation, increase the possibilities of trade of land, and reduce credit rationing. If property rights are not clear there is a significant risk of expropriation which acts like a random tax on returns of investment affecting the level of investment as well as the composition of the investment. Moreover improvements of rights act as reductions in transaction cost and therefore also increase the probability of trading land. Similarly, in competitive credit markets titling encourages lenders to recognize land as collateral reducing the risk premium on lending and hence reducing the restrictions to access and interest rate faced by the poor borrowers. In credit markets with imperfections collateral can reduce agency problems and therefore improve access to credit. The Peruvian rural titling program, PETT, distributed property titles to over 1.1 million rural households, and is possibly one of the largest formalization program targeted to rural areas in the developing world, provides a dramatic natural experiment for testing the channels through which the titles can impact households welfare. This paper conducts an evaluation of the impact over households of having access to a PET title on the reduction of risk of expropriation, gains from trade of land, credit access, including the likelihood of obtaining formal credit, and provision of public goods at the level of the neighborhood. Because the quasi-random program implementation in large measure breaks the link between title acquisition and the variables behind the four channels of impact identified (investment in the household or plot, trade in land, credit demand, and provision of public goods), we are able to construct plausible comparison groups in program and non-program regions via propensity score techniques and use kernel-based matching to estimate the average treatment effect of government property titling. This paper develops a unique new dataset for all rural Peru, which is also a full panel for the LSMS 2000 and partial panel with LSMS 1997. Our results shed light and yield useful insights on the potential impact of titling efforts on investment, security, financial market integration and the provision of local public goods in poor rural communities of Peru.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://idbdocs.iadb.org/WSDocs/getdocument.aspx?docnum=600797&Cache=True
Download Restriction: no

Bibliographic Info

Paper provided by Inter-American Development Bank, Office of Evaluation and Oversight (OVE) in its series OVE Working Papers with number 0705.

as in new window
Length: 64 pages
Date of creation: Jul 2005
Date of revision:
Handle: RePEc:idb:ovewps:0705

Contact details of provider:
Postal: 1300 New York Avenue, NW, Washington, DC 20577
Phone: 202-623-1000
Email:
Web page: http://www.iadb.org/ove
More information through EDIRC

Related research

Keywords: Rural Titlin; Credit rationing; Property rights; Collateral; Risk premium and Agency problems.;

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Baltensperger, Ernst, 1978. "Credit Rationing: Issues and Questions," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 10(2), pages 170-83, May.
  2. James Heckman & Hidehiko Ichimura & Jeffrey Smith & Petra Todd, 1998. "Characterizing Selection Bias Using Experimental Data," NBER Working Papers 6699, National Bureau of Economic Research, Inc.
  3. James J. Heckman & Jeffrey A. Smith, 1995. "Assessing the Case for Social Experiments," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 85-110, Spring.
  4. James J. Heckman, 1989. "Choosing Among Alternative Nonexperimental Methods for Estimating the Impact of Social Programs: The Case of Manpower Training," NBER Working Papers 2861, National Bureau of Economic Research, Inc.
  5. Alston, Lee J & Libecap, Gary D & Schneider, Robert, 1996. "The Determinants and Impact of Property Rights: Land Titles on the Brazilian Frontier," Journal of Law, Economics and Organization, Oxford University Press, vol. 12(1), pages 25-61, April.
  6. Hujer, Reinhard & Wellner, Marc, 2000. "The Effects of Public Sector Sponsored Training on Individual Employment Performance in East Germany," IZA Discussion Papers 141, Institute for the Study of Labor (IZA).
  7. 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 903-37, October.
  8. Heckman, James J & Ichimura, Hidehiko & Todd, Petra E, 1997. "Matching as an Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," Review of Economic Studies, Wiley Blackwell, vol. 64(4), pages 605-54, October.
  9. Migot-Adholla, Shem, et al, 1991. "Indigenous Land Rights Systems in Sub-Saharan Africa: A Constraint on Productivity?," World Bank Economic Review, World Bank Group, vol. 5(1), pages 155-75, January.
  10. Bester, Helmut, 1985. "Screening vs. Rationing in Credit Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 75(4), pages 850-55, September.
  11. Atwood, David A., 1990. "Land registration in Africa: The impact on agricultural production," World Development, Elsevier, vol. 18(5), pages 659-671, May.
  12. Hoff, Karla & Stiglitz, Joseph E, 1990. "Imperfect Information and Rural Credit Markets--Puzzles and Policy Perspectives," World Bank Economic Review, World Bank Group, vol. 4(3), pages 235-50, September.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Nakasone, Eduardo, 2011. "The impact of land titling on labor allocation: Evidence from rural Peru," IFPRI discussion papers 1111, International Food Policy Research Institute (IFPRI).
  2. Kemper, Niels & Klump, Rainer & Schumacher, Heiner, 2011. "Representation of property rights and credit market outcomes: Evidence from a land reform in Vietnam," Proceedings of the German Development Economics Conference, Berlin 2011 45, Verein für Socialpolitik, Research Committee Development Economics.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:idb:ovewps:0705. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Luis Daniel Martinez) The email address of this maintainer does not seem to be valid anymore. Please ask Luis Daniel Martinez to update the entry or send us the correct address.

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.