Abstract

http://ssrn.com/abstract=860544
 
 

References (26)



 


 



Do Courts Matter? Rental Markets and the Law


Pablo Casas-Arce


Arizona State University (ASU) - W.P. Carey School of Business; University of Oxford - Department of Economics; Universitat Pompeu Fabra - Faculty of Economic and Business Sciences

Albert Saiz


University of Pennsylvania - The Wharton School; Institute for the Study of Labor (IZA)

November 28, 2005


Abstract:     
We argue that the allocation of ownership rights will minimize enforcement costs when the legal system is inefficient. In particular, when legal enforcement is costly, there will be a shift from contractual arrangements that rely on such enforcement (such as a rental agreement) towards other forms that do not (such as direct ownership). We then test this prediction on data on the rental housing market, and show that costly enforcement of rental contracts hampers the development of such a market in a cross-section of countries. We argue that this association is not the result of reverse causation from a developed rental market to more investor-protective enforcement. The results provide supportive evidence on the importance of contract enforcement for the development of financial and other markets.

Number of Pages in PDF File: 48

Keywords: contract enforcement, market development, housing rental markets

JEL Classification: K41, L14, R31, J41

working papers series





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Date posted: December 1, 2005  

Suggested Citation

Casas-Arce, Pablo and Saiz, Albert, Do Courts Matter? Rental Markets and the Law (November 28, 2005). Available at SSRN: http://ssrn.com/abstract=860544 or http://dx.doi.org/10.2139/ssrn.860544

Contact Information

Pablo Casas-Arce (Contact Author)
Arizona State University (ASU) - W.P. Carey School of Business ( email )
Tempe, AZ 85287-3706
United States
University of Oxford - Department of Economics ( email )
Manor Road Building
Manor Road
Oxford, OX1 3UQ
United Kingdom
Universitat Pompeu Fabra - Faculty of Economic and Business Sciences ( email )
Ramon Trias Fargas 25-27
Barcelona, 08005
Spain
Albert Saiz
University of Pennsylvania - The Wharton School ( email )
314 Lauder-Fischer Hall
256 South Street
Philadelphia, PA 19104-6330
United States

Institute for the Study of Labor (IZA)
P.O. Box 7240
Bonn, D-53072
Germany
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