Hardly the most important thing going on this week, but Matt Yglesias said something I have some evidence against. Yglesias claimed that, “basically anyone could massively increase the value of a large plot of land in the United States if he were exempted from land use rules.”
What percent of people do you think could massively increase the value of a barren plot of land, even with no land use rules?
When I ran an experiment about intellectual property protection with Bart Wilson, we created a space for people to mine valuable “creative” goods, analogous to writing a hit song. The goods could be distributed to the rest of the subjects in the experiment to create a surplus for everyone.
This screenshot shows time spent in the “studio” for groups that did have intellectual property protection. Group 1 (IP1) spent less time in the studio even than any of the groups who were not offered intellectual property protection. We concluded that Group 1 did not have any people with entrepreneurial tendencies. We had not expected this to happen, so we highlighted the role of entrepreneurs in our conclusion from this experiment. Institutions interact with entrepreneurship. We found that more “entrepreneurship” emerged under the IP institution.
Economist Writing Every Day 