Business Intelligence

Urban Infrastructure And Economic Development: Experimental Evidence From Street Pavement

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Executive Summary

The authors design an infrastructure experiment in Mexico to evaluate the impact of street pavement on housing values and household outcomes. They find that the provision of street pavement raises housing values by 16% and land values by 54%, according to professional appraisals. Using homeowner valuations, they estimate the impact of pavement on housing values to be 25%. At the household level, street paving increased the use of collateral-based credit and average loan size. Additionally, among households on paved streets vehicle ownership went up by 40%, while the number of durable goods augmented by 12% as a result of pavement.

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