 Insecurity of Property Rights and Social Matching in the Tenancy MarketKaren Macours, Alain de Janvry () and Elisabeth Sadoulet () Post-Print from HAL Abstract: This paper shows that insecurity of property rights over agricultural land can have large efficiency and equity costs because of the way it affects matching in the tenancy market. A principal-agent framework is used to model the landlord's decision to rent when he takes into account the risk of losing the land to the tenant and when contract enforcement is decreasing in social distance with the tenant. These effects are quantified for the case of local land rental markets in the Dominican Republic. Results show that insecure property rights lead to matching in the tenancy market along socio-economic lines, severely limiting the size of the rental market and the choice of tenants for landlords, both with efficiency costs. Social segmentation reduces access to land for the rural poor, with high equity costs. Simulations suggest that improving tenure security would increase rental transactions by 21% and the area rented to the poor by 63%. Increased property rights security is hence beneficial not only to asset owners, but also to those with whom they might interact in the market. Keywords: Property rights; Efficiency; Equity; Inequality; Land rental markets (search for similar items in EconPapers) Published in European Economic Review, 2010, 54 (7), pp.880-899. ⟨10.1016/j.euroecorev.2010.02.002⟩ There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00754420 DOI: 10.1016/j.euroecorev.2010.02.002 Access Statistics for this paper More papers in Post-Print from HAL |
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