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Slum growth in Brazilian cities

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  • Alves, Guillermo
Abstract
This paper studies slum growth in Brazilian cities by estimating a spatial equilibrium model with two types of households and two types of housing. I explain the positive correlation observed between slum growth and economic growth in cities with three IV-estimated structural elasticities. The number of low-income households in a city increases with wages with an elasticity of 1.7. Housing rents increase with housing demand with elasticities of 0.37 for non-slum housing and 0.07 for slum housing. Economic growth in cities thus causes slum growth because it attracts large number of low-income households who face higher rent growth for non-slum than slum housing. I further show that as economic growth improves households’ incomes nationwide, an income effect reduces the national slum share. Finally, I find that two policy-relevant counterfactuals significantly increase aggregate income by relocating households into high-wage cities: 1) slum upgrading in high-wage cities 2) reducing the elasticity of non-slum housing rents to housing demand shocks.

Suggested Citation

  • Alves, Guillermo, 2021. "Slum growth in Brazilian cities," Journal of Urban Economics, Elsevier, vol. 122(C).
    • Handle: RePEc:eee:juecon:v:122:y:2021:i:c:s0094119021000097
    DOI: 10.1016/j.jue.2021.103327
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    Cited by:

    1. Guedes, Ricardo & Iachan, Felipe S. & Sant’Anna, Marcelo, 2023. "Housing supply in the presence of informality," Regional Science and Urban Economics, Elsevier, vol. 99(C).
    2. Letrouit,Lucie Michele Maya & Selod,Harris, 2020. "Trust or Property Rights ? Can Trusted Relationships Substitute for Costly Land Registration in West African Cities ?," Policy Research Working Paper Series 9310, The World Bank.
    3. Lucie Letrouit & Harris Selod, 2024. "Informal land markets and ethnic kinship in West African cities [Marchés fonciers informels et cousinage ethnique dans les villes d'Afrique de l'Ouest]," Post-Print hal-04525074, HAL.
    4. Brotherhood, Luiz & Cavalcanti, Tiago & Da Mata, Daniel & Santos, Cezar, 2022. "Slums and pandemics," Journal of Development Economics, Elsevier, vol. 157(C).
    5. Cai, Yongyang & Selod, Harris & Steinbuks, Jevgenijs, 2018. "Urbanization and land property rights," Regional Science and Urban Economics, Elsevier, vol. 70(C), pages 246-257.
    6. Pierre M. Picard & Harris Selod, 2023. "Customary Land Conversion in African Cities," DEM Discussion Paper Series 23-09, Department of Economics at the University of Luxembourg.
    7. M. Picard,Pierre & Selod,Harris, 2020. "Customary Land Conversion and the Formation of the African City," Policy Research Working Paper Series 9192, The World Bank.
    8. Letrouit, Lucie & Selod, Harris, 2024. "Informal land markets and ethnic kinship in West African cities," Regional Science and Urban Economics, Elsevier, vol. 106(C).
    9. Yang, Xintong & Dong, Xin & Yi, Chengdong, 2022. "Informal housing clearance, housing market, and labor supply," Labour Economics, Elsevier, vol. 78(C).
    10. Per G. Fredriksson & Satyendra Kumar Gupta & Weihua Zhao & Jim R. Wollscheid, 2023. "Legal heritage and urban slums," Journal of Regional Science, Wiley Blackwell, vol. 63(1), pages 236-252, January.
    11. Michelle S. Escobar Carías & David W. Johnston & Rachel Knott & Rohan Sweeney, 2022. "Flood disasters and health among the urban poor," Health Economics, John Wiley & Sons, Ltd., vol. 31(9), pages 2072-2089, September.

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    More about this item

    Keywords

    Housing; Slums; Urbanization; Brazil;
    All these keywords.

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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