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This paper estimates slum residents' willingness to pay for formalized land tenure in Pune, India. In so doing, it offers evidence that the legal assurance of slum residents' occupancy of their lands could benefit them. Previous studies have discussed legal and non-legal factors that substantially influence the tenure security of residents in informal settlements. However, it remains unclear to what extent, and how, the assignment of legal property rights through the formalization of land tenure improves the tenure security of residents in informal settlements and living conditions, even in the presence of other legal and non-legal factors that also contribute to their tenure security. To address the question, this study focuses on the city of Pune, India, where government agencies have formalized slums by legally ensuring the occupancy of the residents under "slum declaration." Applying a hedonic price model to an original household survey, this paper investigates how slum residents evaluate formalized land tenure. A spatial econometrics method is also applied to account for spatially autocorrelated unobserved errors. The spatial hedonic analysis finds that the premium of slum declaration is worth 19 percent of the average housing rent in slums. The associated marginal willingness to pay is equivalent to 6 percent of the average household expenditure, although it is heterogeneous depending on a household's caste and other legal conditions. This finding suggests that the assurance of occupancy rights is a vital component of land-tenure formalization policy even if it does not directly provide full property rights.
Hedonic Model --- Housing & Human Habitats --- Property Rights --- Public Sector Management and Reform --- Slum --- Spatial Econometrics --- Urban Housing --- Urban Poverty
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This paper estimates slum residents' willingness to pay for formalized land tenure in Pune, India. In so doing, it offers evidence that the legal assurance of slum residents' occupancy of their lands could benefit them. Previous studies have discussed legal and non-legal factors that substantially influence the tenure security of residents in informal settlements. However, it remains unclear to what extent, and how, the assignment of legal property rights through the formalization of land tenure improves the tenure security of residents in informal settlements and living conditions, even in the presence of other legal and non-legal factors that also contribute to their tenure security. To address the question, this study focuses on the city of Pune, India, where government agencies have formalized slums by legally ensuring the occupancy of the residents under "slum declaration." Applying a hedonic price model to an original household survey, this paper investigates how slum residents evaluate formalized land tenure. A spatial econometrics method is also applied to account for spatially autocorrelated unobserved errors. The spatial hedonic analysis finds that the premium of slum declaration is worth 19 percent of the average housing rent in slums. The associated marginal willingness to pay is equivalent to 6 percent of the average household expenditure, although it is heterogeneous depending on a household's caste and other legal conditions. This finding suggests that the assurance of occupancy rights is a vital component of land-tenure formalization policy even if it does not directly provide full property rights.
Hedonic Model --- Housing & Human Habitats --- Property Rights --- Public Sector Management and Reform --- Slum --- Spatial Econometrics --- Urban Housing --- Urban Poverty
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While urbanization has great potential to facilitate poverty reduction, climate shocks represent a looming threat to such upward mobility. This paper empirically analyzes the effects of climatic risks on the function of urban agglomerations to support poor households to escape from poverty. Combining household surveys with climatic datasets, the panel regression analysis for Chile, Colombia, and Indonesia finds that households in large metropolitan areas are more likely to escape from poverty, indicating better access to economic opportunities in those areas. However, the climate shocks offset such benefits of urban agglomerations, as extreme rainfalls and high flood risks significantly reduce the chance of upward mobility. The findings underscore the need to enhance resilience among the urban poor to allow them to fully utilize the benefits of urban agglomerations.
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Whether individuals and job opportunities are well connected is a key determinant of productive urban labor markets. The overall level of job accessibility in a city depends on the locations of jobs and workers' residences, as well as transport networks. Moreover, who has good access to job opportunities hinges on the trade-off faced by households in their residential choices over job accessibility, living conditions, and housing costs. This paper empirically analyzes the spatial distributions of job accessibility, housing rents, and poverty in Nairobi, Kenya. It finds that workers and jobs are not well connected in the city: Nairobi residents can on average access fewer than 10 percent of existing jobs by foot within an hour. Even using a minibus, they can reach only about a quarter of the jobs. This paper further shows that poorer households and/or those who live in informal settlements can reach a more limited number of jobs. Living closer to job opportunities is indeed costly in Nairobi, not only because housing quality and living conditions tend to be better in such areas, but also job accessibility itself is valued as a great amenity in the housing markets, which challenges low-income households' residential location choice.
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Agglomeration boosts economic growth. A vast literature has empirically assessed the effects of agglomeration by estimating the city population elasticity on wages. This conventional approach is not necessarily suitable for analyzing urbanization at the early stage in developing countries, where a majority of urban workers engage in self-employment and/or informal jobs. Focusing on one of the poorest and largest among those countries, this paper sheds light on an aspect of urbanization and agglomeration: the transition in the mode of labor from self-employment/informal jobs to wage employment/formal jobs. Applying the instrumental variable approach to national labor force survey data sets, the analysis underscores several labor market transitions across space in urban Ethiopia. First, the town population size and the share of workers with wage employment are strongly correlated. The probability of engaging in wage work increases by 4.5 percentage points with a log increase in population size. Second, this relationship is particularly strong among disadvantaged workers, such as the female, young, and/or less educated population. Finally, the study documents higher labor force participation and lower underemployment in larger towns.
Employment and Unemployment --- Gender --- Gender and Poverty --- Gender Gap --- Informality --- Labor Markets --- Macroeconomics and Economic Growth --- Self-Employment --- Social Protections and Labor --- Spatial Economics --- Urban Agglomeration --- Urban Economic Development --- Urbanization --- Wage Employment
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Measuring global poverty requires two types of spatial price adjustments: inter-country price adjustment based on the international purchasing power parities (PPPs) and intra-country price adjustment to account for cost-of-living variations in different parts of a country, especially between urban and rural areas. Current global poverty measurement lacks an adjustment mechanism for this within-country price variation for many countries, particularly in Sub-Saharan Africa. This paper highlights the need for matching reference prices with those the International Comparison Program (ICP) uses for PPP calculation to avoid poverty estimation bias, largely because many countries collected 2011 ICP price information only in urban areas. Data from four Sub-Saharan African countries are used to show that potential bias in estimated poverty rates due to such reference price mismatches ranges from 0.3 to 6.2 points in absolute terms. A larger bias is observed in countries where gaps between urban and rural prices are greater. The analysis also shows potentially large bias due to lack of intra-country price adjustments. These potential biases underscore the urgent need for conducting within-country price adjustments and matching purchasing power parity reference prices with country spatial price deflators. An important first step is to identify what reference prices the 2011PPPs used for each country, which currently is not clear. The World Bank, with ongoing relationships with National Statistics Offices, is well positioned to take up this task to improve the accuracy of the methodology for estimating poverty at the global, regional, and national levels.
Cost of Living --- Global Poverty --- Inequality --- International Comparison Program --- Poverty Assessment --- Poverty Lines --- Poverty Measurement --- Poverty Monitoring and Analysis --- Poverty Reduction --- Purchasing Power Parity
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This study analyzes the impacts of the recent rural road development in Ethiopia on welfare and economic outcomes. The identification of the impacts relies on a difference-in-differences matching approach, taking advantage of the nationally representative household survey and the original road database, both of which are panel data spanning between 2012 and 2016. The results of the econometric analysis overall suggest that Ethiopia's recent rural road development has substantially increased household welfare and supported households in coping with the recent severe droughts. This study estimates that rural roads increased, on average, household consumption by 16.1 percent between 2012 and 2016 (or 3.8 percent per year). The effects of rural road development were largest in the most remote communities, as it increased household consumption by 27.9 percent. Furthermore, in the communities most affected by the El Nino drought, the likelihood of falling into poverty was 14.4 percent lower between 2012 and 2016 if the community was connected by a rural road. Taken together, the results suggest that, by connecting remote communities to markets, rural roads have substantially increased the welfare and resilience of rural households in shock-prone environments.
Agriculture --- Climate Change and Agriculture --- Crops and Crop Management Systems --- Drought --- Environment --- Inequality --- Natural Disasters --- Poverty --- Rural Development --- Rural Road --- Rural Roads and Transport --- Weather Shocks
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This note summarizes the findings of the analysis carried out regarding the poverty and inequality impacts of the ongoing economic crisis in Brazil in 2016 and 2017. The first objective is to get an estimate of the extent to which the deteriorating macroeconomic conditions and shrinking labor markets in Brazil will impact on poverty and inequality. The second objective is to generate a detailed profile of the new poor associated with the crisis. The third and final objective is to get estimates of the additional budget needed for the Bolsa Familia Program to effectively mitigate the poverty impacts of the crisis and protect the past achievements of Brazil in poverty and inequality reduction until the necessary structural reforms take place in Brazil and the engines of growth are reignited.
Business Cycles and Stabilization Policies --- Economic Growth --- Employment --- Inequality --- Labor Market --- Macroeconomics and Economic Growth --- Poverty Monitoring & analysis --- Poverty Reduction --- Poverty Strategy, analysis and Monitoring --- Recession --- Social Development --- Social Protection and Risk Management --- Social Safety Nets/Social Assistance
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This paper examines living conditions-mainly access to infrastructure and basic services-in Kinshasa, by focusing on how they vary within the city and how they are related to household characteristics. First, drawing on a household survey conducted in the capital province in 2018, the paper shows that many Kinshasa residents live with substandard housing and inadequate levels of access to infrastructure and basic services. Second, the level and quality of access to basic services are highly correlated with residents' consumption and education levels, as well as their neighborhood characteristics. Third, despite the presence of negative externalities from the high population density, poor households benefit from living in dense neighborhoods by gaining a minimum level of access. The paper argues that it is imperative to increase the supply of affordable housing to lessen the inequality of access to services in Kinshasa.
Communities and Human Settlements --- Housing --- Inequality --- Informal Settlements --- Multidimensional Poverty --- Poverty Lines --- Poverty Reduction --- Spatial Inequality --- Urban Development --- Urban Housing --- Urban Housing and Land Settlements --- Urban Poverty
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This paper examines spatial heterogeneity in the impacts of the early days of the COVID-19 pandemic on urban household incomes in Ethiopia and Kinshasa, Democratic Republic of Congo. Combining new panel household surveys with spatial data, the fixed-effects regression analysis for Ethiopia finds that households in large and densely populated towns were more likely to lose their labor incomes in the early phase of the pandemic, and their recovery was slower than other households. Disadvantaged groups, such as female, low-skilled, self-employed, and poor, particularly suffered in those towns. In Kinshasa, labor income-mobility elasticities are higher among workers-particularly female and/or low-skilled workers-who live in areas that are located farther from the city core area or highly dense and precarious neighborhoods. The between- and within-city evidence from two Sub-Saharan African countries points to the spatial heterogeneity of COVID-19 impacts, implying the critical role of mobility and accessibility in urban agglomerations.
Accessibility --- Connectivity --- Coronavirus --- COVID-19 --- Employment and Unemployment --- Labor Markets --- Labor Mobility --- Mobility --- Pandemic Impact --- Poverty --- Poverty Reduction --- Social Protections and Labor --- Urban Development --- Urban Economic Development --- Urban Labor Market
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