Paving Streets for the Poor: Experimental Analysis of Infrastructure Effects

Climent Quintana-Domeque and Marco Gonzalez-Navarro

No 757, Economics Series Working Papers from University of Oxford, Department of Economics

Abstract: 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 neighbourhoods 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 via 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.

Keywords: development; infrastructure; credit use; wealth effect; randomized controlled trial (search for similar items in EconPapers)
JEL-codes: C93 H41 O12 O18 (search for similar items in EconPapers)
Date: 2015-09-10
New Economics Papers: this item is included in nep-dev, nep-exp, nep-pke, nep-tre and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Journal Article: Paving Streets for the Poor: Experimental Analysis of Infrastructure Effects (2016)
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