Property Law Culture: Public Law, Private Preferences and the Psychology of Expropriation.

Scholars divide into two main camps in the debate on the role of law in shaping the decisions of individuals. Rational choice scholars argue that individual preferences are exogenous to law, so law can be used instrumentally; realist and socio-legal scholars argue that law is culturally contingent and must be understood in its broader context. Recent work in the theory of reference-dependent preferences may help unite the two schools by suggesting that while social context helps us understand law's operation, law can also determine that context and culture. This would complicate the relationship of law to individual decisions. This paper provides empirical evidence to help determine whether law acts as a reference point, by looking to a major difference in the level of property protection provided by the constitutions of Canada and the United States. Unlike Americans, Canadians do not enjoy constitutional protection against the expropriation of private property. Except where there are statutory restrictions, Canadian governments can expropriate land without compensating the property owner. Therefore, according to reference point theory, attitudes towards expropriation should differ between Americans and Canadians. The author administered a survey to a group of Canadian students, asking them to describe their financial and attitudinal responses to hypothetical scenarios involving government expropriation of their property. The results were then compared to those of a similar, earlier study in the US. If constitutions have expressive power and can act as reference points for shaping individual preferences and culture, we would expect to see a difference in the responses to the two studies. Surprisingly, no such difference was found. Attitudes among Canadian respondents were largely similar to those in the American study. These results challenge the widespread assumption that Americans are more attached to private property than Canadians. [ABSTRACT FROM AUTHOR]