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There Is No Free House: Ethnic Patronage in a Kenyan Slum

Author

Listed:
  • Benjamin Marx
  • Thomas M. Stoker
  • Tavneet Suri

Abstract

Using unique data from one of Africa's largest informal settlements, the Kibera slum in Nairobi, we provide evidence of ethnic patronage in the determination of rental prices and investments. Slum residents pay higher rents and live in lower quality housing (measured via satellite pictures) when the landlord and the locality chief belong to the same ethnicity. Conversely, rental prices are lower, and investments higher when residents and chiefs are co-ethnics. Our identification relies on the exogenous appointment of chiefs and is supported by several tests, including a regression discontinuity design.

Suggested Citation

  • Benjamin Marx & Thomas M. Stoker & Tavneet Suri, 2019. "There Is No Free House: Ethnic Patronage in a Kenyan Slum," American Economic Journal: Applied Economics, American Economic Association, vol. 11(4), pages 36-70, October.
    • Handle: RePEc:aea:aejapp:v:11:y:2019:i:4:p:36-70
    Note: DOI: 10.1257/app.20160484
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    JEL classification:

    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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