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Demand for Housing and Urban Services in Brazil: a Hedonic Approach

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  • Maria da Piedade Morais
  • Bruno de Oliveira Cruz

Abstract

This paper seeks to estimate the demand for housing and urban services in the major Brazilian metropolitan areas (MAs), as a contribution for the formulation of public policies of urban development. The theoretical approach used is the hedonic prices model (Rosen, 1974), which relates price with the property characteristics. The data was obtained from the 1997 National Household Survey (Pnad), published by the Brazilian Institute of Geography and Statistics (IBGE), encompassing 10 MAs. We have verified that the provision of proper housing and urban infrastructure services can significantly increase property prices in metropolitan areas, implying that such policies may have strong redistributive impacts and can be used to fight urban poverty in Brazil. Among the MAs studied, São Paulo presented the highest average rent, independently of the characteristics of the properties. The importance of the present study resides in trying to evaluate the impact of the governmental urban policies through regression analysis, what would allow policy makers to obtain more detailed information on the nature of housing demand – regarding the consumers’ preferences for the different attributes of the house and levels of provision of urban services - as well as on the capacity of cost-recovery, and the social impacts of the different housing, sanitation and urban development programs. O objetivo do presente artigo é fornecer uma estimativa da demanda por habitação e serviços urbanos nas principais regiões metropolitanas (RMs) brasileiras, como subsídio para a elaboração de políticas públicas na área de desenvolvimento urbano. A abordagem teórica utilizada é o modelo de preços hedônicos (Rosen, 1974), o qual relaciona o preço com as diferentes características do imóvel. Os dados utilizados derivam da Pesquisa Nacional de Amostras por Domicílio (Pnad) do Instituto Brasileiro de Geografia e Estatística (IBGE) para o ano de 1997, englobando dez RMs. Verificou-se que a provisão de serviços urbanos como água, esgoto e coleta de lixo pode aumentar significativamente o preço dos imóveis nas cidades brasileiras, o que implica que tais políticas podem ter forte impacto redistributivo. Entre as RMs estudadas, São Paulo apresentou os aluguéis mais elevados, independentemente das características dos imóveis. A importância do presente estudo reside em tentar avaliar o impacto das políticas urbanas por meio da análise de regressão, o que permitiria aos formuladores de política obter informações mais detalhadas sobre a natureza da demanda por habitação – com respeito às preferências dos consumidores pelos diferentes atributos e níveis de provisão dos serviços urbanos da moradia -, bem como sobre a capacidade de recuperação de custos e os impactos dos diferentes programas do governo na área de habitação, saneamento e desenvolvimento urbano.

Suggested Citation

  • Maria da Piedade Morais & Bruno de Oliveira Cruz, 2015. "Demand for Housing and Urban Services in Brazil: a Hedonic Approach," Discussion Papers 0120, Instituto de Pesquisa Econômica Aplicada - IPEA.
  • Handle: RePEc:ipe:ipetds:0120
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    References listed on IDEAS

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    1. Goodman, Allen C., 1978. "Hedonic prices, price indices and housing markets," Journal of Urban Economics, Elsevier, vol. 5(4), pages 471-484, October.
    2. Cobb, Steven, 1984. "The impact of site characteristics on housing cost estimates," Journal of Urban Economics, Elsevier, vol. 15(1), pages 26-45, January.
    3. Anas, Alex & Eum, Sung Jick, 1984. "Hedonic analysis of a housing market in disequilibrium," Journal of Urban Economics, Elsevier, vol. 15(1), pages 87-106, January.
    4. Smith, Barton A., 1978. "Measuring the value of urban amenities," Journal of Urban Economics, Elsevier, vol. 5(3), pages 370-387, July.
    5. Epple, Dennis, 1987. "Hedonic Prices and Implicit Markets: Estimating Demand and Supply Functions for Differentiated Products," Journal of Political Economy, University of Chicago Press, vol. 95(1), pages 59-80, February.
    6. Alan S. Blinder, 1973. "Wage Discrimination: Reduced Form and Structural Estimates," Journal of Human Resources, University of Wisconsin Press, vol. 8(4), pages 436-455.
    7. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    8. Mieszkowski, Peter & Saper, Arthur M., 1978. "An estimate of the effects of airport noise on property values," Journal of Urban Economics, Elsevier, vol. 5(4), pages 425-440, October.
    9. Marcelo Côrtes Nerí, 1999. "Assets, Markets and Poverty in Brazil," Research Department Publications 3055, Inter-American Development Bank, Research Department.
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