Albeit the relevance of property rights is well known, their determinants are still poorly understood. When property is fully protected, some buyers with valuation higher than that of original owners are inefficiently excluded from trade due to transaction costs. When protection of property is weak, low-valuation buyers inefficiently expropriate original owners. The trade-off between these two misallocations implies that property rights will be stronger the more dispersed buyers' preferences are. This prediction survives when original owners have higher political influence on institutional design, and is consistent with novel data on the rules regulating adverse possession of personal and real property and government takings of real property in 125 jurisdictions.