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An Impact Evaluation of Chile’s Progressive Housing Program

Author

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  • Luis Marcano

    () (Office of Evaluation and Oversight at the Interamerican Development Bank.)

  • Inder J. Ruprah

    () (Office of Evaluation and Oversight at the Interamerican Development Bank.)

Abstract

This paper evaluates Progressive Housing Program; a public housing program that facilitates the purchase of a new home. The evaluation finds that the program’s package (savings requirement, voucher and mortgage) design is inappropriate if the program is targeted to the poor. In fact the pro-poor targeting of the program was poor with high under-coverage and high leakage. Further, the benefit, a minimum quality new house, was not sustainable as many households slipped back into the housing shortage category overtime. An impact evaluation reveals that although the program had significant positive effects on materiality conditions (access to water, sewerage, and electricity), it had a negative effect on overcrowding, and had no discernable effects on welfare indicators (poverty, school attendance, occupation ratio, etc.). This could be due to high residential segregation that resulted from attempting to maximize the number of housing solutions on the cheap. The study also cautions against the mechanical use of cost benefit calculations for policy decisions: the program’s internal rate of return was higher than the official cut off rate of 12%.

Suggested Citation

  • Luis Marcano & Inder J. Ruprah, 2008. "An Impact Evaluation of Chile’s Progressive Housing Program," OVE Working Papers 0608, Inter-American Development Bank, Office of Evaluation and Oversight (OVE).
  • Handle: RePEc:idb:ovewps:0608
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    References listed on IDEAS

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    1. repec:spr:portec:v:1:y:2002:i:2:d:10.1007_s10258-002-0010-3 is not listed on IDEAS
    2. Richard Blundell & Monica Costa Dias, 2009. "Alternative Approaches to Evaluation in Empirical Microeconomics," Journal of Human Resources, University of Wisconsin Press, vol. 44(3).
    3. Luis Marcano & Inder Ruprah, 2011. "Incapacity to pay or moral hazard? Public mortgage delinquency rates in Chile," Applied Economics Letters, Taylor & Francis Journals, vol. 18(11), pages 1015-1020.
    4. Edgar O. Olsen, 2000. "The Cost-Effectiveness of Alternative Methods of Delivering Housing Subsidies," Virginia Economics Online Papers 351, University of Virginia, Department of Economics.
    5. Inder J. Ruprah & Luis Marcano, 2007. "A Meta-Impact Evaluation of Social Housing Programs: The Chilean Case," IDB Publications (Working Papers) 33418, Inter-American Development Bank.
    6. Ravallion, Martin, 2007. "How relevant is targeting to the success of an antipoverty program ?," Policy Research Working Paper Series 4385, The World Bank.
    7. Luis Marcano & Inder J. Ruprah, 2008. "Incapacity to Pay or Moral Hazard? Public Mortgage Rates Delinquency in Chile," OVE Working Papers 0308, Inter-American Development Bank, Office of Evaluation and Oversight (OVE).
    8. Inder J Ruprah & Luis T Marcano, 2007. "A Meta-Impact Evaluation of Social Housing Programs: The Chilean Case," OVE Working Papers 0207, Inter-American Development Bank, Office of Evaluation and Oversight (OVE).
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    Cited by:

    1. Jose Rosero, 2012. "The ABC of Housing Strategies: Are Housing Assistance Programs Effective in Enhancing Children's Well Being?," Tinbergen Institute Discussion Papers 12-074/3, Tinbergen Institute.
    2. Laura Jaitman, 2015. "Urban infrastructure in Latin America and the Caribbean: public policy priorities," Latin American Economic Review, Springer;Centro de Investigaciòn y Docencia Económica (CIDE), vol. 24(1), pages 1-57, December.

    More about this item

    Keywords

    Housing Program; Poverty; Segregation; Impact Evaluation; Housing Shortage; Cost-Benefits Analysis;

    JEL classification:

    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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