Property rigths and welfare: impact evaluation of the land regularization program in Quinta do Caju

Abstract

This work analyses the relationship between property rights and welfare. Considering the relevance of institutions in the economy, it is supposed that, if property rights are better defined, attributed and guaranteed in slums, the transaction costs will be low and, consequently, the value of the asset and the income of the owner of this asset will be greater. Further, with the property rights established and gua¬ranteed, the low income communities’ residents are then included in the formal city and are given access to a whole new variety of markets. This study presents an impact evaluation of the Land Regularization Program implemented by the City Hall of Rio de Janeiro in the low income community of Quinta do Caju. The program has given land ownership titles, formally registered by notary public, for the beneficiary households. Using panel data with socioeconomic information of the same households of Quinta do Caju before and after the program, the effects of the program on the welfare of residents are estimated. Appling propensity score matching method, it is observed that the program has a positive and statistically significant impact on the per capita household income of beneficiaries.