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Title: Land Concentration and Long-run Development: Evidence from the Frontier United States

Citation Type: Miscellaneous

Publication Year: 2019

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Abstract: Worldwide, land ownership is concentrated in the hands of relatively few people. This paperstudies the impacts of land concentration on the long-run development of new communities inthe frontier United States using the “checkerboard” pattern of railroad land grants as a naturalexperiment that encouraged land accumulation. Based on modern property tax valuations andother data, historical concentration lowered investment by 23%, overall property value by 4.4%,and population by 8%, indicating persistent effects over 150 years. I argue that landlords’ use ofsharecropping agreements raised the costs of investment, a static inefficiency which persisted dueto transaction costs in land markets. I find little evidence for other explanations, including elitecapture of political systems. I use my empirical estimates to evaluate counterfactual policies,applying recent advances in combinatorial optimization to show that an optimal property rightsallocation would have increased my sample’s agricultural land values by $28 billion (4.8%) in2017.

Url: https://pdfs.semanticscholar.org/a74f/0afa0fbc847feeb73f7d99eca9a436f64317.pdf

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Authors: Smith, Cory

Publisher: Massachusetts Institute of Technology

Data Collections: IPUMS USA

Topics: Housing and Segregation, Population Mobility and Spatial Demography

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