Abstract

http://ssrn.com/abstract=2003926
 
 

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The Formation of Beliefs: Evidence from the Allocation of Land Titles to Squatters


Rafael Di Tella


Harvard Business School - Business, Government and the International Economy Unit; National Bureau of Economic Research (NBER)

Sebastian Galiani


University of Maryland

Ernesto Schargrodsky


Universidad Torcuato Di Tella

April 22, 2006


Abstract:     
We study the formation of beliefs in a squatter settlement in the outskirts of Buenos Aires exploiting a natural experiment that induced an allocation of property rights that is exogenous to the characteristics of the squatters. There are significant differences in the beliefs that squatters with and without land titles declare to hold. Lucky squatters who end up with legal titles report beliefs closer to those that favor the workings of a free market. Examples include materialist and individualist beliefs (such as the belief that money is important for happiness or the belief that one can be successful without the support of a large group). The effects appear large. The value of a (generated) index of “market” beliefs is 20% higher for titled squatters than for untitled squatters, in spite of leading otherwise similar lives. Moreover, the effect is sufficiently large so as to make the beliefs of the squatters with legal titles broadly comparable to those of the general Buenos Aires population, in spite of the large differences in the lives they lead.

Number of Pages in PDF File: 29

Keywords: beliefs, property rights, natural experiment, institutions

JEL Classification: P16, E62

working papers series


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Date posted: February 14, 2012  

Suggested Citation

Di Tella, Rafael and Galiani, Sebastian and Schargrodsky, Ernesto, The Formation of Beliefs: Evidence from the Allocation of Land Titles to Squatters (April 22, 2006). Available at SSRN: http://ssrn.com/abstract=2003926 or http://dx.doi.org/10.2139/ssrn.2003926

Contact Information

Rafael Di Tella
Harvard Business School - Business, Government and the International Economy Unit ( email )
Cambridge, MA
United States
617-495-5048 (Phone)
617-496-5985 (Fax)
HOME PAGE: http://www.people.hbs.edu/rditella/
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Sebastian Galiani (Contact Author)
University of Maryland ( email )
Department of Economics
University of Maryland
College Park, MD 20742
United States
Ernesto Schargrodsky
Universidad Torcuato Di Tella ( email )
Minones 2159
1428 Buenos Aires, 1428
Argentina
+54 11 4784 0080 (Phone)
+54 11 4783 3220 (Fax)
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