The Wall Street Journal carries a story this morning about the benefits of homeownership - for poverty-stricken Latin Americans. Turns out that owning their own homes actually gives them a stake in the society and the motivation to take advantage of the liberalized economies:
The Argentine study followed 1,800 squatter families who in 1981 occupied a one-square-mile piece of what they assumed was public land. It had once served as a garbage dump. Through a quirk of the legal system, roughly half of the settlers in the heart of the neighborhood gained title to their properties, while the other half didn't. The researchers found that over the course of two decades, the title holders surpassed those without them in a host of key social indicators, ranging from quality of house construction to educational performance to rates of teenage pregnancy....
The investigators concluded that titles improved access to credit only slightly. Banks appeared to have a deeply ingrained reluctance to lend to the poor, in part because of the cost and difficulty of foreclosing in Argentina's legal system. But even without bank loans, they said, landowning families improved their homes substantially by squirreling away cash and doing the work themselves. Architects affiliated with the study concluded that homes on titled lots had sturdier walls and sounder roofs, were more spacious and had better sidewalks.
An accompanying study, co-authored by Mr. Di Tella, detected a difference in the attitude of landowners. They were more materialistic and individualistic, and more inclined to say that money was important to happiness, and that individual initiative leads to success.
The researchers found that landownership status seemed to make no difference in employment or income. But it did seem to affect the way residents spent their money, and their aspirations and expectations. The researchers figure that the children of the landowners could eventually earn significantly more than the children of the untitled.
The results aren't exactly counterintuitive, but every once in a while, it helps to be reminded that the system you believe in actually works.
