An empirical analysis of land property lawsuits and rainfalls

Abstract

This article using the database of Taiwanese land property lawsuits studies the economic effects of rainfalls on land property lawsuits during the period of Japanese colonial rule (1920-1941). The results obtained from basic ordinary least squares indicate that it shows no significant influences. However, an interesting result is that, when we adopt the approach of two stage least squares and use the variables of temperature and evaporation as the instrument variables of rainfalls, we find that there are highly significant influences on the lawsuits of land property. If 1 year comes with low average rainfalls, it means that the costs of productive inputs increase, because the available natural resource will decrease, and brings the distorted using of land property.