Paving Streets for the Poor: Experimental Analysis of Infrastructure Effects

Marco Gonzalez-Navarro and Climent Quintana-Domeque

The Review of Economics and Statistics, 2016, vol. 98, issue 2, 254-267

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 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.

Keywords: development; infrastructure; credit use; wealth e ect; randomized controlled trial (search for similar items in EconPapers)
JEL-codes: C93 H41 O12 O18 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (27)

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Working Paper: Paving Streets for the Poor: Experimental Analysis of Infrastructure Effects (2015)
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