Paving streets for the poor: Experimental analysis of infrastructure effects
Gonzalez-Navarro, M; Quintana-Domeque, C
Date: 21 April 2016
Journal
Review of Economics and Statistics
Publisher
Massachusetts Institute of Technology Press (MIT Press) / Harvard University, Kennedy School of Government
Publisher DOI
Abstract
We provide the first experimental estimation of the effects of the supply of publicly financed urban infrastructure on property values. Using random allocation of first-time street asphalting of residential streets located in peripheral neighborhoods in Mexico, we show that within two years of the intervention, households are able to ...
We provide the first experimental estimation of the effects of the supply of publicly financed urban infrastructure on property values. Using random allocation of first-time street asphalting of residential streets located in peripheral neighborhoods in Mexico, we show that within two years of the intervention, households are able to transform their increased property wealth into significantly larger rates of vehicle ownership, household appliances, and home improvements. Increased consumption is made possible by both credit use and less saving. A cost-benefit analysis indicates that the valuation of street asphalting as capitalized into property values is about as large as construction costs.
Economics
Faculty of Environment, Science and Economy
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