Estimating the housing investment externalities effects of a public housing program in Chile

Abstract

In this thesis project, I study the housing investment externalities effects of the DS49, a public housing program in RM, Chile. Using a quasi-experimental strategy, I take advantage of the characteristics and time variation of the urban treatment to estimate the causal externalities effects as a function of distance. Reduced form estimation of the effects demonstrates that, on average, households that are closest to the housing projects invest more in housing quality and less in security that those furthest away. However, this effect is predominant in high income households, while those with less resources may be discouraged to invest. I separate the effects by the time of the project s inauguration and discuss its implications. A back-of-the-envelope calculation for housing investment externalities indicate that these could represent an additional return on investment of up to 5.1 %.