Evidence suggests that major events, like war or natural disasters, affect risk attitudes. This paper shows that similar effects can also be associated with institutional changes, such as improved property rights. Using the case of a large titling program in Peru, we find that the program reduced risk aversion. The effects are sizable, persistent, and seem to be driven by improved security of tenure. These results highlight an understudied channel through which property rights could shape economic outcomes.
Nota bibliográficaFunding Information:
We would like to thank Chris Bidner, Stefan Dercon, Juan José Diaz, James Fenske, David Freeman, Francisco Galarza, Kristian Lopez, Rocco Macchiavello, Hugo Ñopo, Hitoshi Shigeoka, Máns Söderbom and seminar participants at Simon Fraser University, RAND and the Peruvian Central Bank for useful comments and suggestions. A previous version of this paper circulated under the title ‘Can public policies change risk aversion? The unexpected effects of a property titling program’.
© 2020 Elsevier Ltd
- Property rights
- Risk aversion
- Security of tenure