Checkerboards and Coase: Transactions Costs and Efficiency in Land Markets

摘要: The Coase theorem emphasizes the role transactions costs play in efficient market outcomes. We document inefficient outcomes, presence of a cost, southern California land markets and corresponding transition to outcomes after cost is eliminated. In late 1800s, Palm Springs, CA was evenly divided, checkerboard fashion, property rights assigned alternating blocks Agua Caliente tribe non-Indian landowner by US Federal government. Sales leasing restrictions on created large development those lands; consequently, we observe very little housing investment. Non-Indian lands provide benchmark for lands. Once removed, there convergence between American Indian-owned non both number homes constructed value homes.