TY  - BOOK
AU  - Casas‐Arce,Pablo
AU  - Saiz,Albert
TI  - Owning versus renting: do Courts Matter?
SN  - 00222186
AV  - HB73 JOU 
PY  - 2010///
CY  - Chicago
PB  - University of Chicago Press
KW  - Cities
KW  - Contract enforcement
KW  - Contracts
KW  - Housing
KW  - Instrumental variables
KW  - Investors
KW  - Leases
KW  - Legal systems
KW  - Market development
N2  - We develop a legal contract enforcement theory of the decision to own or lease. The allocation of ownership rights will minimize enforcement costs when the legal system is inefficient. In particular, when legal enforcement of contracts is costly, there will be a shift from arrangements that rely on such enforcement (such as a rental agreement) toward other forms that do not (such as direct ownership). We then test this prediction and show that costly enforcement of rental contracts hampers the development of the rental housing 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 and is not driven by alternative institutional channels. The results provide supportive evidence for the importance of legal contract enforcement for market development and the optimal allocation of property rights
UR  - https://doi.org/10.1086/649962
ER  -