IDEAS home Printed from https://ideas.repec.org/a/eee/wdevel/v88y2016icp67-78.html
   My bibliography  Save this article

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

Author

Listed:
  • 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.

Suggested Citation

  • 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
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0305750X1630420X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.worlddev.2016.07.013?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Jaime Sobrino, 2014. "Housing prices and submarkets in Mexico City: a hedonic assessment," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 29(1), pages 57-84.
    2. Stephen Knack & Philip Keefer, 1997. "Does Social Capital Have an Economic Payoff? A Cross-Country Investigation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(4), pages 1251-1288.
    3. Hector M. Nuñez & Dusan Paredes & Rafael Garduño-Rivera, 2017. "Is crime in Mexico a disamenity? Evidence from a hedonic valuation approach," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 59(1), pages 171-187, July.
    4. Munoz-Pina, Carlos & de Janvry, Alain & Sadoulet, Elisabeth, 2003. "Recrafting Rights over Common Property Resources in Mexico," Economic Development and Cultural Change, University of Chicago Press, vol. 52(1), pages 129-158, October.
    5. Jean O. Lanjouw & Philip I. Levy, 2002. "Untitled: A Study of Formal and Informal Property Rights in Urban Ecuador," Economic Journal, Royal Economic Society, vol. 112(482), pages 986-1019, October.
    6. David E. Dowall & Paavo Monkkonen, 2007. "Consequences of the Plano Piloto: The Urban Development and Land Markets of Brasília," Urban Studies, Urban Studies Journal Limited, vol. 44(10), pages 1871-1887, September.
    7. Goodman, John Jr. & Ittner, John B., 1992. "The accuracy of home owners' estimates of house value," Journal of Housing Economics, Elsevier, vol. 2(4), pages 339-357, December.
    8. Varley, Ann, 2007. "Gender and Property Formalization: Conventional and Alternative Approaches," World Development, Elsevier, vol. 35(10), pages 1739-1753, October.
    9. Annette M. Kim, 2004. "A market without the ‘right’ property rights," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 12(2), pages 275-305, June.
    10. Munoz-Pina, Carlos & de Janvry, Alain & Sadoulet, Elisabeth, 2003. "Recrafting Rights over Common Property Resources in Mexico," Economic Development and Cultural Change, University of Chicago Press, vol. 52(1), pages 129-158, October.
    11. Gonzalez-Navarro, Marco & Quintana-Domeque, Climent, 2009. "The reliability of self-reported home values in a developing country context," Journal of Housing Economics, Elsevier, vol. 18(4), pages 311-324, December.
    12. Galiani, Sebastian & Schargrodsky, Ernesto, 2004. "Effects of land titling on child health," Economics & Human Biology, Elsevier, vol. 2(3), pages 353-372, December.
    13. Sebastian Galiani & Ernesto Schargrodsky, 2004. "The Health Effects of Land Titling," Working Papers 78, Universidad de San Andres, Departamento de Economia, revised Dec 2004.
    14. Robert J. Barro, 1998. "Determinants of Economic Growth: A Cross-Country Empirical Study," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262522543, April.
    15. Matthew R. Cleary, 2007. "Electoral Competition, Participation, and Government Responsiveness in Mexico," American Journal of Political Science, John Wiley & Sons, vol. 51(2), pages 283-299, April.
    16. Hanan G. Jacoby & Bart Minten, 2007. "Is Land Titling in Sub-Saharan Africa Cost-Effective? Evidence from Madagascar," The World Bank Economic Review, World Bank, vol. 21(3), pages 461-485, June.
    17. David E. Dowall & Michael Leaf, 1991. "The Price of Land for Housing in Jakarta," Urban Studies, Urban Studies Journal Limited, vol. 28(5), pages 707-722, October.
    18. Jenny Schuetz, 2008. "Are Mortgage Loans the New Toasters? The Roles of Housing Demand and Political Patronage in Mexican Housing Finance Author," International Real Estate Review, Global Social Science Institute, vol. 11(2), pages 1-31.
    19. Paavo Monkkonen, 2012. "The Demand for Land Regularisation: Theory and Evidence from Tijuana, Mexico," Urban Studies, Urban Studies Journal Limited, vol. 49(2), pages 271-288, February.
    20. Mendez, Fabio, 2006. "The value of legal housing titles: An empirical study," Journal of Housing Economics, Elsevier, vol. 15(2), pages 143-155, June.
    21. Field, Erica Marie, 2005. "Property Rights and Investment in Urban Slums," Scholarly Articles 3634150, Harvard University Department of Economics.
    22. Erica Field, 2005. "Property Rights and Investment in Urban Slums," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 279-290, 04/05.
    23. Friedman, Joseph & Jimenez, Emmanuel & Mayo, Stephen K., 1988. "The demand for tenure security in developing countries," Journal of Development Economics, Elsevier, vol. 29(2), pages 185-198, September.
    24. Kim, Annette M., 2007. "North versus South: The Impact of Social Norms in the Market Pricing of Private Property Rights in Vietnam," World Development, Elsevier, vol. 35(12), pages 2079-2095, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    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.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Deininger, Klaus & Ali, Daniel Ayalew & Alemu, Tekie, 2008. "Impacts of land certification on tenure security, investment, and land markets : evidence from Ethiopia," Policy Research Working Paper Series 4764, The World Bank.
    2. Jan K. Brueckner & Harris Selod, 2009. "A Theory of Urban Squatting and Land-Tenure Formalization in Developing Countries," American Economic Journal: Economic Policy, American Economic Association, vol. 1(1), pages 28-51, February.
    3. Paavo Monkkonen, 2012. "The Demand for Land Regularisation: Theory and Evidence from Tijuana, Mexico," Urban Studies, Urban Studies Journal Limited, vol. 49(2), pages 271-288, February.
    4. Deininger, Klaus & Goyal, Aparajita, 2012. "Going digital: Credit effects of land registry computerization in India," Journal of Development Economics, Elsevier, vol. 99(2), pages 236-243.
    5. Brueckner, Jan K. & Lall, Somik V., 2015. "Cities in Developing Countries," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 1399-1455, Elsevier.
    6. Cai,Yongyang & Selod,Harris & Steinbuks,Jevgenijs, 2015. "Urbanization and property rights," Policy Research Working Paper Series 7486, The World Bank.
    7. 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.
    8. Brueckner, Jan K., 2013. "Slums in developing countries: New evidence for Indonesia," Journal of Housing Economics, Elsevier, vol. 22(4), pages 278-290.
    9. Brueckner, Jan K., 2013. "Urban squatting with rent-seeking organizers," Regional Science and Urban Economics, Elsevier, vol. 43(4), pages 561-569.
    10. Nilopa Shah, 2014. "Squatting On Government Land," Journal of Regional Science, Wiley Blackwell, vol. 54(1), pages 114-136, January.
    11. Panman, Alexandra & Lozano Gracia, Nancy, 2022. "Titling and beyond: Evidence from Dar es Salaam, Tanzania," Land Use Policy, Elsevier, vol. 117(C).
    12. Benito Arruñada, 2009. "Property titling and conveyancing," Economics Working Papers 1177, Department of Economics and Business, Universitat Pompeu Fabra.
    13. Italo A. Gutierrez & Oswaldo Molina, 2020. "Reverting to Informality: Unregistered Property Transactions and the Erosion of the Titling Reform in Peru," Economic Development and Cultural Change, University of Chicago Press, vol. 69(1), pages 317-334.
    14. Lai, Yani & Wang, Jiayuan & Lok, Waiming, 2017. "Redefining property rights over collective land in the urban redevelopment of Shenzhen, China," Land Use Policy, Elsevier, vol. 69(C), pages 485-493.
    15. Xu Guangdong, 2013. "Property Rights, Law, and Economic Development," The Law and Development Review, De Gruyter, vol. 6(1), pages 117-142, July.
    16. Galiani Sebastian & Schargrodsky Ernesto, 2016. "The Deregularization of Land Titles," Man and the Economy, De Gruyter, vol. 3(2), pages 169-188, December.
    17. Vogl, Tom S., 2007. "Urban land rights and child nutritional status in Peru, 2004," Economics & Human Biology, Elsevier, vol. 5(2), pages 302-321, July.
    18. Lai, Yani & Zheng, Xian & Choy, Lennon H.T. & Wang, Jiayuan, 2017. "Property rights and housing prices: An empirical study of small property rights housing in Shenzhen, China," Land Use Policy, Elsevier, vol. 68(C), pages 429-437.
    19. Nakamura, Shohei, 2017. "Tenure Security Premium in Informal Housing Markets: A Spatial Hedonic Analysis," World Development, Elsevier, vol. 89(C), pages 184-198.
    20. Brueckner, Jan K. & Rabe, Claus & Selod, Harris, 2019. "Backyarding: Theory and evidence for South Africa," Regional Science and Urban Economics, Elsevier, vol. 79(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:wdevel:v:88:y:2016:i:c:p:67-78. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/worlddev .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.