How are property rights linked to economic activity?

The ability to possess property for ones benefit and to exclude others is understood as a desire or want of many individuals. Research has shown that individuals will expend effort to acquire resources that meet a need or want. Providing a system whereby individuals may acquire property incentivizes those individuals to work toward that end. That is, people will expend effort to acquire property if they have the knowledge that they will be able to retain the property for their personal use and without the threat of forfeiting the property to others. They will undertake work that they were not otherwise willing to undertake in the absence of acquiring new property. Some individuals are willing to work longer and harder incentivized by the amount of property they are able to acquire as a result of their efforts. This tendency often results in greater efficiency in effort and overall economic productivity. Increased productivity of individuals is linked to increases in total economic output in an economy. 

What is Capital Formation?

Property ownership rights allow individuals to possess and demonstrate the results of their own efforts. Individuals are then able to employ that property toward creating additional property. That is, individuals can use their acquired property (or provide it to others) with the intention of generating or acquiring ownership rights in more property. In furtherance of capital formation, the nature of property allows ownership rights in any resource to be divided among individuals. As such, individuals can employ their resources collectively in the creation or acquisition of new property.

• Example: Abes ownership of property allows him employ the services of Bob in exchange for providing Bob with a form of property. Bobs effort generates additional property for Abe, which Abe can use for the creation of additional property.

Related Topics

• Property Law (Intro)
• Tangible and Intangible property?
• Knowledge Capital
  
• Calculated Intangible Value
• Real and Personal Property?
• Chattel
• Littoral Land
• Fixtures?
• Appurtenance
• Readily Removable Fixtures
• What is ownership?
• Role of Government in ownership of property?
• Allodial System
• Role of property rights in economic activity?
• What are the limitations on property ownership rights?
• What is nuisance?
• What is Zoning?
• What is Eminent Domain?
• Just Compensation
• What is Property Taxation?
• Assessment Ratio
• Millage Rate
• Homeowners Association (HOA)
• Accession?
• Rule of First Possession?
• Lost or Mislaid Items?
• Adverse Possession?
• Encroachment
• Contracts?
• Gift?
• Confusion?
• Establishing and transferring ownership in real property?
• Absolute Title
• Warranty Deed
• Register of Deeds
• Conveyance
• What is a fee simple interest in real property?
• Absolute Interest
• Restrictive Covenant
• What is a life estate in real property?
• What is a leasehold estate in real property?
• What are common types of co-ownership relationships in real property?
• Owning Real Estate Personally vs as LLC
• What if Co-Owners of Real Estate Want Out
• Community Property and Separate Marital Property?
• What is an easement interest in real property?
• What is a license of real or personal property?
• Bundle of Rights
• Absorption Rate
• Fair Housing Act
• Federal Housing Administration (FHA)
• Housing and Urban Development (HUD)
• National Housing Act
• Design Build Contract
• Building Permits
• Certificate of Acceptance
• Construction Surety Bond
• Acquisition, Development, and Construction Loan (ADC)
• Flipping (Real Property)
• Buy, Strip, and Flip
• Homeowner Affordability and Stability Plan
• Building Residual Method
• Accessory Dwelling Unit
• Property Management
• Cost-Plus Contract
• Real Estate Investment Fund
• Listing Agreement
• Property Lawyers
• Multiple Listing Service
• Home Equity
• Register of Deeds
• Title Search
• Opinion of Title
• Certificate of Title
• Abstract of Title
• Chain of Title
• Clear Title
• Cloud on Title
• Defective Title
• Defect of Record
• Action to Quiet Title
• Abeyance
• Encumbrance
• Affidavit of Title
• Warranty of Title
• Title Insurance
• American Land Title Association (ALTA)
• Earnest Money
• Private Mortgage Insurance
• Closing (Property)
• Settlement Statement
• Real Estate Settlement Procedure Act (RESPA)
• HUD-1 Form
• Closing Statement
• Closing Costs
• Buying Real Estate as an LLC
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• What are the Rights of a Mortgage Holder?
• Deed of Trust or Security Deed?
• Trust Deed
• Certificate of Release
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• Lis Pendens
• Deficiency Judgment
  
• Short Sale 
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• Deed in Lieu of Foreclosure
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• One Percent Rule
  
• Net Lease
• Triple Net Lease (NNN)
• True Lease Definition
• Land Lease Option
• Hell or High Water Contract
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• Attornment
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• Co-Tenancy Clause
  
• What is a bailment?
• Consignment
• Unilateral-benefit and mutual benefit bailments?