Familiarity breeds acceptance on property rights

Economist Daniel K. Benjamin reports on a new study from the Quarterly Journal of Economics that shows squatters who experience the benefits of property rights protections positively influences their beliefs about markets. The study is the February 2007 issue of the QJE and was authored by Rafael Di Tella, Sebastian Galiani, and Ernesto Schargrodsky, and Bejamine writes about it in his tangents column for PERC Reports, a publicatin of the Property and Envrionment Research Center (PERC) in Bozeman, MT. The authors studied the formation of squatter settlements outside of Buenes Aires, comparing families that received secure property rights with those that did not. The authors surveyed about 400 squatter families and found, as reported by Bejamin: “The squatters who received secure property rights are 20 percent more positive toward the market system than are the unlucky squatters. Indeed, the attitudes of the squatters with secure property rights are just as positive toward the market system as the attitudes of much more aﬔuent Argentinians who are much better educated and have much higher incomes.” Benjamin concludes:

The importance of this study is that it suggests that changes in attitudes are no accident, and that it may be possible, on a broader scale, to overcome the widespread hostility toward market systems. The aphorism that “seeing is believing” is rarely more applicable, for it appears that the creation of private property rights has the potential to fundamentally change how people perceive the world, and thus, perhaps, the institutions and policies they are willing to adopt. For those who believe that environmental quality, individual choice, and personal freedom are important, this is good news indeed.

The article by Benjamin is in the most recent issue of PERC Reports and can be found here. The full study in the QJE can be found here.