The Meaning of Property 'Rights': Law vs. Economics?

Abstract

Property rights have become fundamental in economic analysis. Given their importance, it might be expected that there would be some consensus in the economics literature about the meaning of property rights. But no such consensus appears to exist. Economists define property rights in various and inconsistent ways, some of which diverge significantly from the conventional understandings of legal scholars and judges.

This paper explores ways in which definitions of property rights in the economic literture diverge from conventional legal understandings, and how those divergences can create inter-disciplinary confusion and bias economic analyses. Indeed, some economists' idiosyncratic definitions of property rights, if used to guide policy, could lead to suboptimal economic outcomes.

JEL Classification: K11, A12, D23, Q15