The establishment of property rights for urban squatters in Peru increased ____________. (Related to Application 3 on page 56.)

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Application 3 PROPERTY RIGHTS AND URBAN SLUMS APPLYING THE CONCEPTS #3: What is the role of government in a market economy? বাংলাদেশ মহিলা ঢাকাম্পানীর অন্তর One role of government in a market economy is to enforce prop- erty rights. Roughly 10 percent of the world's population lives in urban squatter settlements, with little security in housing. A household that occupies public land could be relocated at any time, and would lose all of its immobile possessions, including a dwelling the household built and maintained. The insecurity in tenure discourages investment in housing construction and maintenance. One policy option is property titling, that is, granting owner- ship of a dwelling to its occupant. A person who owns a dwelling reaps all the benefits of regular repair and maintenance, includ- ing any increase in market value, so granting property rights increases the incentive for property maintenance. A study of a program in Peru that granted 1.2 million property titles to urban squatters on public land provides evidence that urban property titling increases investment in housing repair and maintenance. The substantial increase in housing renovation improved the housing conditions of the urban households. Related to Exercise 3.5. SOURCES: (1) Erica Field, "Property Rights and Investment in Urban Slums," Journal of the European Economic Association 3 (2005), pp. 279-290. (2) Tim Besley, "Property Rights and Investment Incentives: Theory and Evidence from Ghana," Journal of Political Economy 103(5) (1995), pp. 903-937.