The Contribution of Environmental Amenities to Low-income Housing: A Comparative Study of Bangkok and Jakarta

Abstract

Central and local governments and their creditors are increasingly interested in cost recovery for public services. These strategies have two aims: increasing revenues and making a better connection between benefits received and consumer bills. This paper estimates a hedonic model for household-level data in a rare contrast of slums in two Asian mega-cities to provide comparative information about how the poor value environmental amenities and basic infrastructure access. The results suggest that slum housing prices do reflect differentials in public service access and that rough estimates of the value of access can be cheaply and usefully obtained for planning purposes.