Abstract: This paper estimates the effect of a location-based price subsidy of utilities and property taxes on the housing market in Bogotá, Colombia. In Bogotá, neighborhood blocks are divided into 6 subsidy codes using arbitrary cutoffs on a block quality score. I use the discontinuity introduced by the cutoffs in a Regression Discontinuity Design to study the effect of the subsidy on the housing market. I find that blocks receiving a higher subsidy have newer houses - implying more construction in such areas. I also find a capitalization of the subsidy into housing prices: properties in areas receiving a small subsidy are cheaper than those receiving a bigger subsidy. These results suggest that a careful evaluation of location-based subsidies’ incidence needs to consider potential capitalization into the housing market and other unintended effects such as new construction or renovations.
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Bio: Juan Pablo Uribe is a 5th year Ph.D. student in the Department of Economics at Brown University. He works in applied microeconomics with a focus on urban and development economics. He uses spatial methods to evaluate how large-scale investments in infrastructure affect economic outcomes. Recent areas of research have included location-based housing subsidies, the Interstate highway system and federal internet expansion programs.
Prior to Brown, Juan worked as a consultant investigating recent inequality trends in Latin America at the World Bank and the Inter-American Development Bank (IDB). Juan Pablo received a bachelor's and master's degree from Los Andes University in Bogotá, Colombia.
The S4 Graduate Student Paper Prize
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