Using unique data from one of Africa's largest informal settlements, the Kibera slum in Nairobi, we provide evidence of ethnic patronage in the determination of rental prices and investments. Slum residents pay higher rents and live in lower quality housing (measured via satellite pictures) when the landlord and the locality chief belong to the same ethnicity. Conversely, rental prices are lower, and investments higher when residents and chiefs are co-ethnics. Our identification relies on the exogenous appointment of chiefs and is supported by several tests, including a regression discontinuity design.
Marx, Benjamin, Thomas M. Stoker, and Tavneet Suri.
"There Is No Free House: Ethnic Patronage in a Kenyan Slum."
American Economic Journal: Applied Economics,
Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
Economic Development: Human Resources; Human Development; Income Distribution; Migration
Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
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