Homeownership, Renting and Market Failures : Evidence from Indian Slums

Housing rents are a major part of a slum household’s expenditure.I exploit a large scale ’big-push’ national urban renewal policyreform in India between 2005 and 2012 to empirically evaluate themulti-dimensional effect of rental reforms and housing provisions onhome ownership, rental expenditures and quality of dwelling for slumhouseholds. One of the main benefits accruing to the affordable housingpolicy was to provide the entitlement of the land to the femalehead of the households as a measure of women empowerment.1 Combininga novel pooled cross-sectional household survey data for year2002, 2008, 2012 and nighttime lights activity data at district level, Ifind the reform significantly increases the real rents by 18.2% and theprobability to transition to homeownership by 16.7 percentage points.Females are 2.4 percentage points more likely to be the head of thehousehold. The findings highlight the role of market failure