Measuring Economic Consequences: Property Rights, Commercial Resource Industries and Aboriginal Rights in Canada
Abstract: This paper presents an empirical assessment of the economic consequences that have resulted from judicial disruptions in formal legal property rights in an otherwise institutionally stable jurisdiction. We use an event study methodology to estimate the market response to a series of five landmark Supreme Court of Canada decisions that reinterpreted aboriginal rights in Canada, thereby disrupting the stability and security of the existing property rights regime. Representatives of Canada's resource industries have argued that these judgments created a "cloud of uncertainty" surrounding the security of their property rights, constrained their access to resource stocks, and imposed significant economic costs on their commercial activities. We test these claims using firm level equity market and financial micro-data. Our results provide support for view that disruptions in formal property rights as a result of judicial decisions have measurable economic impacts. However, we find that these impacts are not uniform in size or direction across decisions, industries, or firm-types.
