August 21, 2008
Chang on Takings Compensation
Yun-Chien Chang (NYU) has posted A Framework of Takings Compensation Assessment on SSRN. Here's the abstract:
The mainstream literature discusses only the design that the government assesses property value for takings compensation ex post. A few papers propose to let condemnees self-assess property value ex ante. Two other alternatives - ex ante government assessment and ex post self-assessment - have been neglected. Furthermore, previous papers usually assume that assessments are accurate, not taking into account the facts that the takings compensation condemnees receive may not equal the amount of compensation the law intends to award. The literature often assumes that assessing is costless, failing to recognize that the actual high assessment costs may render undesirable an otherwise efficient standard for takings compensation.
In this Article, I propose a framework of four prototype assessment methods for appraising takings compensation, based on who assesses and at what time. I use assessment costs and assessment accuracy to evaluate the merits of the four assessment methods. I find that, theoretically speaking, the scholarly-proposed models and the currently-implemented regimes are unlikely to produce accurate assessments, no matter which assessment method they use. These models or regimes are also not as low-cost as claimed.
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