Paper #607

Title:

The choice of titling system in land

Authors:

Benito Arruñada and Nuno Garoupa

Date:

March 2001 (Revised: December 2004)

Abstract:

This paper analyzes the choice of the socially optimal titling system assuming rational individual choices about recording, assurance and registration decisions. It focuses on the enforcement of property rights on land under private titling and the two existing public titling systems, recording and registration. When the reduction in the expected costs of eviction compensates the higher cost of initial registration, it is more efficient to introduce a registration system rather than a recording system. The development of private "title assurance" improves the standing of recording as compared to registration. This improvement depends, however, on the efficiency of the assurance technology and, also, on corrective taxation that is needed to align individual optimization, which disregards the transfer element in eviction, with social objectives.

Keywords:

Land transfer, registration, property rights, title assurance, insurance

JEL codes:

K11, K12, L85

Area of Research:

Business Economics and Industrial Organization

Published in:

Journal of Law and Economics, 48 (2), 2005, 709-727

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