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Location and welfare in cities: impacts of policy interventions on the urban poor

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  • Kapoor, Mudit
  • Lall, Somik V.
  • Lundberg, Mattias K. A.
  • Shalizi, Zmarak

Abstract

Informal settlements are an integral part of the urban landscape in developing countries. These settlements are widely distributed within cities, including central business centers and peripheral areas with environment hazards. In most cases, residents of these settlements do not have access to basic public services and amenities. In this paper, the authors examine the impact of interventions, such as upgrading basic services and resettlement policies, on the welfare of residents of these informal settlements, who are typically the urban poor. To examine these interventions, they estimate models of residential location choice and allow households to be sensitive to commuting costs to work, demand for public services, and preferences for community composition. The authors'empirical analysis is based on recently collected survey data from Pune, India, and shows that poor households prefer to live close to work and in communities that consist of people sharing common socio-demographic characteristics. From the perspective of households living in informal settlements, upgrading settlements in the original place is welfare enhancing. If a household must be relocated, it greatly prefers to be moved to a community that resembles its current community.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3318.

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Date of creation: 01 May 2004
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Handle: RePEc:wbk:wbrwps:3318

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Keywords: Municipal Financial Management; Public Health Promotion; Decentralization; Housing&Human Habitats; Urban Services to the Poor; Municipal Financial Management; Housing&Human Habitats; VN-Acb Mis -- IFC-00535908; Urban Housing; City Development Strategies;

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  1. Somik Lall & Uwe Deichmann & Mattias KA Lundberg & Nazmul Chaudhury, 2004. "Tenure, Diversity and Commitment: Community Participation for Urban Service Provision," Journal of Development Studies, Taylor & Francis Journals, vol. 40(3), pages 1-26.
  2. Daniel McFadden, 1977. "Modelling the Choice of Residential Location," Cowles Foundation Discussion Papers 477, Cowles Foundation for Research in Economics, Yale University.
  3. Baland, J.M. & Platteau, J.P., 1994. "Does Hiterogeneity Hinder Collective Action," Papers, Notre-Dame de la Paix, Sciences Economiques et Sociales 146, Notre-Dame de la Paix, Sciences Economiques et Sociales.
  4. Ross, Stephen & Yinger, John, 1999. "Sorting and voting: A review of the literature on urban public finance," Handbook of Regional and Urban Economics, Elsevier, in: P. C. Cheshire & E. S. Mills (ed.), Handbook of Regional and Urban Economics, edition 1, volume 3, chapter 47, pages 2001-2060 Elsevier.
  5. Patrick Bayer & Robert McMillan & Kim Rueben, 2004. "Residential Segregation in General Equilibrium," Working Papers, Economic Growth Center, Yale University 885, Economic Growth Center, Yale University.
  6. McGuire, Martin, 1974. "Group Segregation and Optimal Jurisdictions," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 82(1), pages 112-32, Jan.-Feb..
  7. Jha, Saumitra & Rao, Vijayendra & Woolcock, Michael, 2007. "Governance in the Gullies: Democratic Responsiveness and Leadership in Delhi's Slums," World Development, Elsevier, vol. 35(2), pages 230-246, February.
  8. Schelling, Thomas C, 1969. "Models of Segregation," American Economic Review, American Economic Association, vol. 59(2), pages 488-93, May.
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Cited by:
  1. Takeuchi, Akie & Cropper, Maureen & Bento, Antonio, 2006. "The welfare effects of slum improvement programs : the case of Mumbai," Policy Research Working Paper Series 3852, The World Bank.

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