Children's understanding of public ownership was examined in two studies. In the first, descriptive study, children in three age groups (5–6, 8–9. and 11–12 years) were interviewed about ownership of their school and the city's buses. The hypothesis, that with increasing age the children's understanding of public ownership would change from being based on physical to abstract concepts, was supported. In the second, experimental study, a different sample of children (mean age = 7.5 years) from those in Study 1 were interviewed about bus ownership. Children who thought that the bus driver owned the buses were selected and formed into friendship dyads. Prior to interaction one member of each dyad was shown a video depicting a bus driver receiving instructions from another person whereas their partner viewed a neutral video unrelated to the bus driver Half of the dyads then discussed bus ownership, the remaining dyads discussed a neutral topic. The bus driver video alone was insufficient to enable children to infer that drivers did not own the buses. Peer discussion about bus ownership had a far greater positive effect. This effect was strongly related to the making of rejection and transaction statements that were indicative of an active reappraisal of the initial concept of bus ownership.