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- Legislation and standards
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Last edited 20 Feb 2018
In economics, property rights are theoretical and legal constructs for determining control over, and use of, a resource or good. The basis for all forms of market exchange is derived from property rights. The four basic components, often referred to as a ‘bundle of rights’, of an economic good are as follows:
- The right to use the good or resource.
- The right to derive income from the good or resource.
- The right to transfer the good or resource to others.
- The right to enforce property rights.
 Types of property rights
 Open-access property
This is property that is not owned or managed by anyone and there is no control over its access or constraint over its use. While no one can exclude anyone else from using it, one person’s use of it may reduce or impinge on the quantity that is available to others. It is free to use because it is often too expensive, or physically impossible, to establish legal boundaries. Examples of this type of property include navigable airspace, ocean fisheries, rivers and canals, beaches, and so on.
 Public property
This is property that is owned by everyone but the state or community control its access and use. Resources of this kind are allocated by political motivations rather than economic ones. Examples include a national park or state-owned enterprise.
 Common property
Also known as collective property, this is property that is owned by a group of individuals collectively. This collective control the access, use and exclusion that applies to the property. While this may not be as open-access as the above types, it can allow for conflicts to be managed more effectively.
Because property rights cannot be established, the effectiveness of markets in terms of the allocation, pricing and rationing of these resources is substantially reduced.
 Private property
This is excludable property, in that use, exclusion and management are controlled by the private legal owner. The private owner has the exclusive right to use and benefit from the property, although they may exchange it on a voluntary, rent, inheritance, charity or sale basis.
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