The Consumption Benefits of Investment in Infrastructure: The Evaluation of Sites-and-Services Programs in Underdeveloped Countries

Journal of Development Economics, Vol. 25 No. 2, pp. 263-284, April 1987

22 Pages Posted: 7 Apr 2008

See all articles by Daniel Kaufmann

Daniel Kaufmann

Natural Resource Governance Institute (NRGI); The Brookings Institution

John M. Quigley

University of California, Berkeley, College of Letters & Science, Department of Economics (Deceased); University of California, Berkeley, Haas School of Business, Real Estate Group (Deceased)

Abstract

The justifications for housing subsidy programs in developing countries often rely upon substantial indirect benefits accruing to program participants (in the form of improved health, earning capacity or employment, or non-market activity). The empirical analysis in this paper suggests that such programs may often be justified solely on the basis of direct impacts. The paper presents a methodology for deriving rigorously the direct Hicksian benefits of housing subsidy programs such as "sites-and-services" and "slum upgrading" projects in developing countries. The methodology is used to evaluate the net benefits of a sites and services project typical of recent urban shelter programs sponsored by the World Bank. The results suggest that the direct benefits of such programs may be substantial. In the particular case analyzed, the rate of return approaches 40 percent.

Suggested Citation

Kaufmann, Daniel and Quigley, John M., The Consumption Benefits of Investment in Infrastructure: The Evaluation of Sites-and-Services Programs in Underdeveloped Countries. Available at SSRN: https://ssrn.com/abstract=1116664

Daniel Kaufmann (Contact Author)

Natural Resource Governance Institute (NRGI) ( email )

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United States

HOME PAGE: http://www.resourcegovernance.org

The Brookings Institution ( email )

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Washington, DC 20036
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HOME PAGE: http://www.brookings.edu/experts/kaufmannd

John M. Quigley

University of California, Berkeley, College of Letters & Science, Department of Economics (Deceased) ( email )

Berkeley, CA 94720-3880
United States
510-643-7411 (Phone)
510-643-7357 (Fax)

University of California, Berkeley, Haas School of Business, Real Estate Group (Deceased) ( email )

Berkeley, CA 94720-1900
United States

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