earlier we looked at a natural experiment in Argentina where
some squatters were randomly given the option of obtaining property
rights for the land that they were squatting on.
And in that module we looked at the effect of having the option
of obtaining property rights on children's help.
So we did an intention to treat analysis because not all squatters
actually obtained property rights for their land.
Now that we know about instrumental variables analysis we can actually
look at the true effect of having property rights on various outcome
variables.
So instead of looking at children's health I'm gonna look at a different
paper that uses the same natural experience to look at the effect
of having property rights on various beliefs you hold.
So the researchers went to the squatters and asked them a series
of questions.
They asked, do you believe that it is possible to be successful
on your own or is a large group that supports each other necessary?
Do you believe that having money is important to be happy?
In general, people who put effort end up working much better, better,
worse, much worse, than those who do not put in effort.
In general in our country when you say that one can trust other
people or that people cannot be trusted.
So the overall question is what's the effect of having property
rights on these beliefs on people's answers to these questions?
And this table shows the main results.
So in the notes here we see all coms present 2SL less regressions,
2SL less, two stage least squares.
Remember that's the key word for instrumental variables analysis.
Where property right, that's our treatment variable that we want
to know the effect of having property rights on these various believes,
is instrumented with property right availability.
So that's our instrument.
Remember this is an analysis of noncompliance.
Not everyone who's given the option of obtaining property rights
did.
So our instrument is whether you were given the option of obtaining
rights, property right availability.
So in each column corresponds to a different regression, a different
2 stage least squares regression for each of the 4 different outcome
variables.
So let's just look at the first column where we wanna know people's
answers.
Do you believe that it is possible to be successful on your own
or as a large group that supports each other necessary?
So here we see that the coefficient on property rights, the treatment
variable is 0.144 and if we did a confidence interval using this
standard error and parenthesis we would see that this is statistically
significantly not zero.
It's positive.
This is a true causal effect of having property rights on your beliefs
that it's possible
to be successful on your own and you don't need a large group.
Now if you add some control variables, some other variables that
might affect your beliefs the result doesn't change.
Next let's look at the second outcome, do you think that money is
important to be happy?
Again we see that having property rights has a causal effect on
your belief that money is important and the same thing's true even
if we add control variables.
The third outcome, in general, people who put effort working end
up better than people who don't.
Actually, property rights don't seem to have an effect on your beliefs
about that.
At least we can't tell whether it does or not because if you do
make a confidence interval you're gonna see that the confidence
interval here contains zero, so we can't tell if this positive number
is a true causal effect or is it just a statistical noise and we
see the same thing with when once we add controls.
We get a number that's close to zero statistically.
The final outcome variable
can others be trusted in our country?
It seems that having property rights makes people think that others
can be trusted.
And same thing's true if we had controls.
And this final column all they did was combine these four outcome
variables, into a single outcome variable, that they called market
beliefs, and conclude that having property rights
makes you more likely to have market beliefs in the sense of believing
in the answers to these questions.
So that's the main finding in this paper, where they use two stage
least squares to do an instrumental variables analysis, where there
is non-compliance because not everyone actually obtains property
rights when they when they are given the option.
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