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A Question of Title: Property Rights and Asset Values

Author

Listed:
  • Thomas J. Miceli

    (University of Connecticut)

  • Henry J. Munneke

    (University of Georgia)

  • C. F. Sirmans

    (Florida State University)

  • Geoffrey K. Turnbull

    (Georgia State University)

Abstract

This paper examines the impact of land title systems on property values. The predominant system in the U.S., the recording system, awards title to claimants over current possessors, whereas the Torrens registration system awards title to the current owner. In theory, the registration system maximizes property value, all else equal, but in practice, the systems differ depending on the risk of a claim and administrative costs. A natural experiment in Cook County, Illinois, where both systems have existed since 1897, allows a test of the theory. The results, based on commercial and industrial properties, reveal that parcels tend to self-select into the two systems based on the predictions of the theory.

Suggested Citation

  • Thomas J. Miceli & Henry J. Munneke & C. F. Sirmans & Geoffrey K. Turnbull, 2008. "A Question of Title: Property Rights and Asset Values," Working papers 2008-32, University of Connecticut, Department of Economics.
    • Handle: RePEc:uct:uconnp:2008-32
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    References listed on IDEAS

    as
    1. Thomas J Miceli & C. F Sirmans & Geoffrey K Turnbull, 2003. "Land Ownership Risk and Urban Development," Journal of Regional Science, Wiley Blackwell, vol. 43(1), pages 73-94, February.
    2. McMillen, Daniel P. & McDonald, John F., 1991. "Urban land value functions with endogenous zoning," Journal of Urban Economics, Elsevier, vol. 29(1), pages 14-27, January.
    3. Munneke, Henry J., 1996. "Redevelopment Decisions for Commercial and Industrial Properties," Journal of Urban Economics, Elsevier, vol. 39(2), pages 229-253, March.
    4. Daniel P. McMillen & John F. McDonald, 1989. "Selectivity Bias in Urban Land Value Functions," Land Economics, University of Wisconsin Press, vol. 65(4), pages 341-351.
    5. Miceli, Thomas J & Sirmans, C F, 1995. "The Economics of Land Transfer and Title Insurance," The Journal of Real Estate Finance and Economics, Springer, vol. 10(1), pages 81-88, January.
    6. Hans R. Isakson & Mark D. Ecker, 2001. "An Analysis of the Influence of Location in the Market for Undeveloped Urban Fringe Land," Land Economics, University of Wisconsin Press, vol. 77(1), pages 30-41.
    7. Matthew Baker & Thomas Miceli & C. F. Sirmans & Geoffrey K. Turnbull, 2001. "Property Rights by Squatting: Land Ownership Risk and Adverse Possession Statutes," Land Economics, University of Wisconsin Press, vol. 77(3), pages 360-370.
    8. Thomas Miceli & C.F. Sirmans & Geoffrey Turnbull, 1998. "Title Assurance and Incentives for Efficient Land Use," European Journal of Law and Economics, Springer, vol. 6(3), pages 305-323, November.
    9. Rajeev H. Dehejia & Sadek Wahba, 2002. "Propensity Score-Matching Methods For Nonexperimental Causal Studies," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 151-161, February.
    10. Baker, Matthew & Miceli, Thomas J & Sirmans, C F & Turnbull, Geoffrey K, 2002. "Optimal Title Search," The Journal of Legal Studies, University of Chicago Press, vol. 31(1), pages 139-158, January.
    11. Colwell, Peter F. & Munneke, Henry J., 1997. "The Structure of Urban Land Prices," Journal of Urban Economics, Elsevier, vol. 41(3), pages 321-336, May.
    12. Lee, Lung-fei & Maddala, G S & Trost, R P, 1980. "Asymptotic Covariance Matrices of Two-Stage Probit and Two-Stage Tobit Methods for Simultaneous Equations Models with Selectivity," Econometrica, Econometric Society, vol. 48(2), pages 491-503, March.
    13. Miceli, Thomas J & Munneke, Henry J & Sirmans, C F & Turnbull, Geoffrey K, 2002. "Title Systems and Land Values," Journal of Law and Economics, University of Chicago Press, vol. 45(2), pages 565-582, October.
    14. Brownstone, David & De Vany, Arthur, 1991. "Zoning, Returns to Scale, and the Value of Undeveloped Land," The Review of Economics and Statistics, MIT Press, vol. 73(4), pages 699-704, November.
    15. Miceli, Thomas J. & Sirmans, C. F. & Turnbull, Geoffrey K., 2000. "The Dynamic Effects of Land Title Systems," Journal of Urban Economics, Elsevier, vol. 47(3), pages 370-389, May.
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    Cited by:

    1. 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.

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    More about this item

    Keywords

    Land title system; property rights; recording system; Torrens system;
    All these keywords.

    JEL classification:

    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • P14 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Property Rights
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns

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