Effects of Land Titling

The empirical evaluation of the causal effects of land titling typically suffers from selectivity bias. The allocation of property rights across households in the population is usually not random but based on wealth, family characteristics, individual effort, or other mechanisms built on differences between the groups that acquire property rights and the groups that do not. We exploit a natural experiment in the allocation of land titles to overcome this problem. More than twenty years ago, a group of squatters occupied a piece of land in a suburban area of Buenos Aires, Argentina. When the Congress passed an expropriation law transferring the land from the former owners to the squatters, some of the former owners surrendered the land (and received a compensation), while others decide to sue in the slow Argentine courts. These different decisions by the former owners generated an allocation of property rights that is exogenous to the characteristics of the squatters. Our results show significant effects of urban land property rights on housing investment, household size, and school performance. Instead, we find only weak effects on access to credit markets and n