Measuring Risk on Investment in Informal (Illegal) Housing: Theory and Evidence from Pune, India

In this paper, we analyze a household's decision to invest in informal (illegal) housing in developing countries. Using a simple model of housing supply, we show that the difference in the rates of return on housing investment in the formal and informal sectors reflects the additional risk asso...

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Main Authors:	Kapoor, Mudit, le Blanc, David
Format:	Journal Article
Language:	EN
Published:	2012
Subjects:	Personal Finance D140 Illegal Behavior and the Enforcement of Law K420 Microeconomic Analyses of Economic Development O120 Formal and Informal Sectors Shadow Economy Institutional Arrangements O170 Economic Development: Regional, Urban, and Rural Analyses Transportation O180 Urban, Rural, and Regional Economics: Housing Demand R210
Online Access:	http://hdl.handle.net/10986/5895

id	okr-10986-5895
recordtype	oai_dc
spelling	okr-10986-58952021-04-23T14:02:23Z Measuring Risk on Investment in Informal (Illegal) Housing: Theory and Evidence from Pune, India Kapoor, Mudit le Blanc, David Personal Finance D140 Illegal Behavior and the Enforcement of Law K420 Microeconomic Analyses of Economic Development O120 Formal and Informal Sectors Shadow Economy Institutional Arrangements O170 Economic Development: Regional, Urban, and Rural Analyses Transportation O180 Urban, Rural, and Regional Economics: Housing Demand R210 In this paper, we analyze a household's decision to invest in informal (illegal) housing in developing countries. Using a simple model of housing supply, we show that the difference in the rates of return on housing investment in the formal and informal sectors reflects the additional risk associated with the latter. Using household survey data from Pune (a large city in India), we estimate this risk premium in the city to be approximately 22%, or 150 basis points. We use our approach to estimate the informal risk premium for cities in other countries based on results from previous studies. 2012-03-30T07:35:04Z 2012-03-30T07:35:04Z 2008 Journal Article Regional Science and Urban Economics 01660462 http://hdl.handle.net/10986/5895 EN http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Journal Article India
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	EN
topic	Personal Finance D140 Illegal Behavior and the Enforcement of Law K420 Microeconomic Analyses of Economic Development O120 Formal and Informal Sectors Shadow Economy Institutional Arrangements O170 Economic Development: Regional, Urban, and Rural Analyses Transportation O180 Urban, Rural, and Regional Economics: Housing Demand R210
spellingShingle	Personal Finance D140 Illegal Behavior and the Enforcement of Law K420 Microeconomic Analyses of Economic Development O120 Formal and Informal Sectors Shadow Economy Institutional Arrangements O170 Economic Development: Regional, Urban, and Rural Analyses Transportation O180 Urban, Rural, and Regional Economics: Housing Demand R210 Kapoor, Mudit le Blanc, David Measuring Risk on Investment in Informal (Illegal) Housing: Theory and Evidence from Pune, India
geographic_facet	India
relation	http://creativecommons.org/licenses/by-nc-nd/3.0/igo
description	In this paper, we analyze a household's decision to invest in informal (illegal) housing in developing countries. Using a simple model of housing supply, we show that the difference in the rates of return on housing investment in the formal and informal sectors reflects the additional risk associated with the latter. Using household survey data from Pune (a large city in India), we estimate this risk premium in the city to be approximately 22%, or 150 basis points. We use our approach to estimate the informal risk premium for cities in other countries based on results from previous studies.
format	Journal Article
author	Kapoor, Mudit le Blanc, David
author_facet	Kapoor, Mudit le Blanc, David
author_sort	Kapoor, Mudit
title	Measuring Risk on Investment in Informal (Illegal) Housing: Theory and Evidence from Pune, India
title_short	Measuring Risk on Investment in Informal (Illegal) Housing: Theory and Evidence from Pune, India
title_full	Measuring Risk on Investment in Informal (Illegal) Housing: Theory and Evidence from Pune, India
title_fullStr	Measuring Risk on Investment in Informal (Illegal) Housing: Theory and Evidence from Pune, India
title_full_unstemmed	Measuring Risk on Investment in Informal (Illegal) Housing: Theory and Evidence from Pune, India
title_sort	measuring risk on investment in informal (illegal) housing: theory and evidence from pune, india
publishDate	2012
url	http://hdl.handle.net/10986/5895
_version_	1764396692656881664

Measuring Risk on Investment in Informal (Illegal) Housing: Theory and Evidence from Pune, India

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