Full Citation
Title: Location Preferences and Slums Formation: Evidence from a Panel of Residence Histories
Citation Type: Miscellaneous
Publication Year: 2019
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Abstract: What is the role of location in slum formation? We use a panel of residential trajectories experienced by slum residents and out-of-slum, subsidized housing dwellers in Santiago, Chile, to examine the characteristics of location choices made by these two groups over dierent periods of life that occurred between 1960-2008. We show that while slum and subsidized housing dwellers are born in municipalities with statistically comparable levels of poverty, economic activity and proximity to city center, slum dwellers end up living in inferior housing but within municipalities with lower poverty levels, higher economic activity and closer to the city center. Consequently, labor force participation among slum dwellers is signicantly higher. From a revealed preferences approach, this result suggests that slum dwellers are willing to sacrice housing quality for geographical access to better economic opportunities. As a validity test, we implement a trade-o experiment designed to elicit individuals' willingness to substitute housing quality for better location. We nd that, compared to subsidized housing residents, slum dwellers are signicantly more likely to prioritize location quality over housing quality, a result that is consistent with their revealed preferences of location.
Url: https://sistemas.colmex.mx/Reportes/LACEALAMES/LACEA-LAMES2019_paper_163.pdf
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Authors: Celhay, Pablo A.; Undurraga, Raimundo
Publisher: Department of Industrial Engineering and Center for Applied Economics
Data Collections: IPUMS International
Topics: Housing and Segregation, Land Use/Urban Organization, Other
Countries: Chile