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What are public services worth, and to whom? Non-parametric estimation of capitalization in Pune

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  • Lall, Somik V.
  • Lundberg, Mattias

Abstract

The availability and quality of basic public services are important determinants of urban quality of life. In many cities, rapid population growth and fiscal constraints are limiting the extent to which urban governments can keep up with increasing demand for these services. It therefore becomes important to prioritize provision of those services to best reflect local demand. We present a strategy to estimate the demand for public services, which is sensitive to heterogeneity in preferences across types of households, and the non-parametric estimation addresses problems arising from functional form restrictions. Using data from Pune, India, we estimate the demand for public services, as represented by the marginal change in the self-assessed monthly rental price of dwellings from the services. We find that the value of publicly-provided services accruing to the poor is greater than that going to wealthier households, and even untargeted across-the-board investment in specific services can be progressive.

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  • Lall, Somik V. & Lundberg, Mattias, 2008. "What are public services worth, and to whom? Non-parametric estimation of capitalization in Pune," Journal of Housing Economics, Elsevier, vol. 17(1), pages 34-64, March.
    • Handle: RePEc:eee:jhouse:v:17:y:2008:i:1:p:34-64
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    2. Grigorescu Adriana, 2018. "Public Services between the Citizen’s Need and the Possibilities of the Administration," HOLISTICA – Journal of Business and Public Administration, Sciendo, vol. 9(2), pages 23-34, August.
    3. Nguyen-Hoang, Phuong & Yinger, John, 2011. "The capitalization of school quality into house values: A review," Journal of Housing Economics, Elsevier, vol. 20(1), pages 30-48, March.
    4. Grigorescu, Adriana, 2010. "Serviciile publice între nevoia cetăţeanului şi posibilităţile administraţiei [Public services between the citizen need and administration potential]," MPRA Paper 25132, University Library of Munich, Germany.
    5. Brueckner, Jan K. & Lall, Somik V., 2015. "Cities in Developing Countries," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 1399-1455, Elsevier.

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