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Where do Property Rights Matter More? Explaining the Variation in Demand for Property Titles across Cities in Mexico

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  • Monkkonen, Paavo

Abstract

This paper examines the variation in the value of property rights to housing in Mexico, focusing specifically on differences between urban housing markets. Roughly 30% of owner-occupied houses in Mexico do not have a proper deed. Houses with no deed are estimated to be five percent less valuable than otherwise similar houses with a full deed, yet this premium varies widely across cities. I match data from the 2012 and 2014 National Survey of Household Incomes and Expenditures to different sources of city-level data in order to examine hypotheses explaining this variation in a multilevel regression framework. I find that deeds are valued more in cities with more highly educated residents, more political competition, and more voting. Measures of local economic activity, degree of informality, and the regulatory bureaucracy are not associated with higher value to full property rights. Additionally, I find that more educated households value deeds more, and having a deed is more valuable for larger houses in neighborhoods with less vacancy and higher infrastructure quality. Based on these results, I suggest funds to subsidize titling should be redirected to places where titles are worth more. More broadly, I suggest policymakers reconsider framing property-titling programs as poverty alleviation. Low-income households would benefit more from subsidies for improvements to housing and residential infrastructure. At the same time, the federal government should further push to reduce the costs of transferring property.

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  • Monkkonen, Paavo, 2016. "Where do Property Rights Matter More? Explaining the Variation in Demand for Property Titles across Cities in Mexico," World Development, Elsevier, vol. 88(C), pages 67-78.
    • Handle: RePEc:eee:wdevel:v:88:y:2016:i:c:p:67-78
    DOI: 10.1016/j.worlddev.2016.07.013
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    Cited by:

    1. Panman, Alexandra & Lozano Gracia, Nancy, 2022. "Titling and beyond: Evidence from Dar es Salaam, Tanzania," Land Use Policy, Elsevier, vol. 117(C).
    2. James Rycroft & John M. Luiz, 2018. "Homelessness, Property Rights, and Institutional Logics," Working Papers 750, Economic Research Southern Africa.
    3. Hawley, Zackary & Miranda, Juan José & Sawyer, W. Charles, 2018. "Land values, property rights, and home ownership: Implications for property taxation in Peru," Regional Science and Urban Economics, Elsevier, vol. 69(C), pages 38-47.
    4. Chris Garbers & Guangling Dave Liu, 2017. "Macroprudential policy and foreign interest rate shocks: A comparison of different instruments and regulatory regimes," Working Papers 719, Economic Research Southern Africa.
    5. Ferreira, Frederico Poley Martins & Ávila, Paulo Coelho, 2018. "Who has secure land tenure in the urban areas of Brazil? Evidence from the state of Minas Gerais," Land Use Policy, Elsevier, vol. 75(C), pages 494-504.

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