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There Is No Free House: Ethnic Patronage in a Kenyan Slum

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Abstract

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.

Citation

Marx, Benjamin, Thomas M. Stoker, and Tavneet Suri. 2019. "There Is No Free House: Ethnic Patronage in a Kenyan Slum." American Economic Journal: Applied Economics, 11 (4): 36-70. DOI: 10.1257/app.20160484

Additional Materials

JEL Classification

  • J15 Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
  • O15 Economic Development: Human Resources; Human Development; Income Distribution; Migration
  • O17 Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
  • O18 Economic Development: Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
  • R21 Urban, Rural, Regional, Real Estate, and Transportation Economics: Housing Demand
  • R31 Housing Supply and Markets
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