|
|
|
|
||||
|
||||
Loggers Vs. Campers: Compensation for the Taking of Property RightsRon GiammarinoUniversity of British Columbia - Sauder School of Business Ed NosalFederal Reserve Bank of Cleveland February 9, 2004 Sauder School of Business Working Paper FRB of Cleveland Working Paper No. 04-06 Abstract: Governments often have the power to take property rights from private citizens but their responsibility to pay compensation is typically not well specified. In this paper we examine how the compensation rule adopted by a country affects both private investment decisions and takings decisions. We build on a widely accepted argument that any lump sum compensation, including zero, is the socially optimal compensation scheme. The lump sum compensation result hinges critically on the assumptions that the government maximizes social welfare and that the level of private investment does not affect the alternative use of the property rights. We find that when either of these assumptions are relaxed, the optimal compensation scheme will generally depend upon market values. The model presented here provides strong support for market value compensation for the taking of property rights in modern societies.
Number of Pages in PDF File: 17 Keywords: takings, market value compensation, property rights JEL Classification: D63, G18, G31, K22 working papers seriesDate posted: February 15, 2004 ; Last revised: October 30, 2007Suggested CitationContact Information
|
|
|||||||||||||||||||||||||||||
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
FAQ
Terms of Use
Privacy Policy
Copyright
This page was processed by apollo6 in 0.578 seconds
