An Economic Analysis of Eminent Domain

A theoretical analysis of land assembly with and without eminent domain concludes that, contrary to traditional assumptions, eminent domain is not necessarily a more efficient institution than the free market for consolidating many contiguous but separately owned parcels into a single ownership unit. In practice, prices paid under eminent domain may differ systematically from the "fair market value" standard, depending on court costs of buyer and seller. Evidence from urban renewal supports the hypothesis that, due to the structure of court costs, high-valued properties receive more than market value and low-valued properties receive less than market value. Disciplines Marketing | Other Business | Other Education | Real Estate This journal article is available at ScholarlyCommons: http://repository.upenn.edu/hcmg_papers/122 An Economic Analysis of Eminent Domain Author(s): Patricia Munch Source: Journal of Political Economy, Vol. 84, No. 3 (Jun., 1976), pp. 473-498 Published by: The University of Chicago Press Stable URL: http://www.jstor.org/stable/1829865 Accessed: 06-06-2016 15:27 UTC Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at http://about.jstor.org/terms JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact [email protected]. The University of Chicago Press is collaborating with JSTOR to digitize, preserve and extend access to Journal of Political Economy This content downloaded from 130.91.116.52 on Mon, 06 Jun 2016 15:27:22 UTC All use subject to http://about.jstor.org/terms An Economic Analysis of Eminent Domain