Chapter 74: Economics of Property Law

Richard D. Coe

Economics of property law Property law is the body of law that establishes the rules governing ownership rights over scarce resources. Ownership rights are multifaceted—often referred to as a “bundle of rights”—but in general such rights encompass three broad areas of control over a specific resource: the right to exclude (the ability of the owner to prevent others from using the resource), the right to use (the ability of the owner to use the resource in the manner he or she sees fit), and the right to transfer (the ability of the owner to assign ownership rights to the resource to another). The economic analysis of property law is primarily concerned with the effect of various property rules on the allocation of resources and whether such effects conform to the economic concept of efficiency. 1 Equity issues are also addressed but to a lesser degree. Ownership rights to a resource ...

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