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Land values, property rights, and home ownership: Implications for property taxation in Peru

Zackary Hawley (), Juan Jose Miranda and W. Charles Sawyer

Regional Science and Urban Economics, 2018, vol. 69, issue C, 38-47

Abstract: This paper evaluates the effect of property rights on property values in Peru. Previous research on squatting has shed light on how the provision of formal land titles affects a number of socioeconomic outcomes and a subset of this research has provided estimates on how the provision of formal titles affects property values. However, the phenomenon of squatting encompasses a variety of informal property rights distinct from the possession of a legal title. Using an exceptionally rich household data set including geo-location at the community level we study the effects of both formal and informal property rights on property values. Having a title increases property values by almost 7 percent and squatting on the land by invasion reduces values by about 6 percent. Using these estimates, we determine the potential losses of property tax revenue and are able to study the issue of squatting in the context of public finance.

Keywords: Property rights; Squatting; Property taxation; Hedonic price function (search for similar items in EconPapers)
Date: 2018
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DOI: 10.1016/j.regsciurbeco.2017.12.007

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