DP16405 How Property Shapes Distributional Preferences

Author(s): Maria Bigoni, Marco Fabbri
Publication Date: July 2021
Keyword(s): Fairness, Institutional Change, lab-in-the-field experiment, Land Tenure Reform, Land Titling
JEL(s): C93, D01, D31
Programme Areas: Development Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=16405

We study how distributional preferences are affected by a major property rights reform that transformed informal use-rights over land traditionally characterizing rural Beninese villages in a system akin to private ownership. The design combines the randomized control-trial implementation of the reform across villages with lab-in-the-field experiments eliciting villagers' distributional choices -- both when luck is the source of situational inequality and when an unequal distribution is originated by merit considerations. Results show that reforming allocation rules in the direction of impersonal market-alike institutions increases participants' acceptance of inequality determined by luck, while leaving participants' tolerance for inequality generated by merit unaffected.