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The Economic Consequences of Insecure Property Rights

Author

Listed:
  • Yehonatan Givati
  • Oren Rigbi

Abstract

Secure property rights support efficient allocation and investment, yet their effects in affluent urban markets remain understudied. We examine Jerusalem properties built on church-owned land under 99-year leases approaching expiration, creating substantial legal and political uncertainty. Using all residential transactions from 2004–2024, we compare nearby properties with secure and insecure rights within the same blocks. Insecure rights reduce transaction likelihood by about 20 percent and prices by 10–15 percent on average, revealing large costs of legal uncertainty. A present-value framework implies that market participants assign a substantial, but far from certain, probability to losing rights.

Suggested Citation

  • Yehonatan Givati & Oren Rigbi, 2026. "The Economic Consequences of Insecure Property Rights," CESifo Working Paper Series 12899, CESifo.
    • Handle: RePEc:ces:ceswps:_12899
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights

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