Property Rights and Investment in Urban Slums
AbstractThis paper examines the effect of changes in tenure security on residential investment in urban squatter neighborhoods. To address the endogeneity of property rights, I make use of variation in ownership status induced by a nation-wide titling program in Peru. In a difference-in-difference analysis, I compare the change in housing investment before and after the program among participating households to the change in investment among two samples of non-participants. My results indicate that strengthening property rights in urban slums has a significant effect on residential investment: the rate of housing renovation rises by more than two-thirds of the baseline level. The bulk of the increase is financed without the use of credit, indicating that changes over time reflect an increase in investment incentives related to lower threat of eviction.
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Bibliographic InfoPaper provided by Harvard University Department of Economics in its series Scholarly Articles with number 3634150.
Date of creation: 2005
Date of revision:
Publication status: Published in Journal of the European Economic Association
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