(1) Department of Economics, University of Connecticut, Storrs, CT 06269, USA;(2) Department of Finance and Real Estate Center, School of Business Administration, University of Connecticut, Storrs, CT 06269, USA
Abstract:
Although it is axiomatic that property rights of infinite duration are necessary for owners to make efficient long term investments in their property, time limits on property rights are pervasive in the law. This paper provides an economic justification for such limits by arguing that they actually enhance property values in the presence of imperfect information. In so doing, the analysis offers a coherent approach for understanding what otherwise appear to be unrelated doctrines in the law.
