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Housing supply in the presence of Iiformality

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  • Sant'Anna, Marcelo Castello Branco
  • Iachan, Felipe Saraiva
  • Guedes, Ricardo Brito

Abstract

We study housing supply in markets where informal housing is common. Using a combination of census and satellite data, we estimate housing supply for more than 90 metropolitan areas in Brazil. We find that widespread informal housing increases the housing supply elasticity, partially offsetting the downward pressure of geographical constraints. Our empirical approach is guided by a monocentric city model that includes informal housing. Our identification strategy relies on the use of two novel instruments, combining demographic data and public land ownership. As an illustration of the approach, we use the supply elasticity estimates to forecast the response of future housing prices to natural population growth

Suggested Citation

  • Sant'Anna, Marcelo Castello Branco & Iachan, Felipe Saraiva & Guedes, Ricardo Brito, 2021. "Housing supply in the presence of Iiformality," FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) 823, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil).
  • Handle: RePEc:fgv:epgewp:823
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