Willingness to Pay for Health-Enhancing Housing Components and The Self-Help Approach to Housing the Urban Poor

The self-help approach, which proposes that the government facilitate rather than directly provide housing improvements in urban poor communities, could lead households to underinvest in housing components with strong health benefits. This argues for the direct provision of health beneficial housing components, owing to their public goods nature. Data from a survey of households from Metro Manila and Metro Cebu in the Philippines was used to identify which housing components had significant influence on health status. Hedonic regressions were used to estimate the lack of willingness to pay by households for such housing components as sewers, pest control, and removal of stagnant water. The net cost of providing health beneficial housing components were estimated to be the additional rent from having such housing components improved less the value of health benefits these generate. Lower bound estimates of the value of improved health are measured as the foregone health expenditures implied by reduced health risks.