The Impact of Upgrading Municipal Infrastructure on Property Prices: Evidence from Brazil
Peer Reviewed
Date issued
May 2017
Subject
Urban Renewal;
Housing Price;
Urban Infrastructure;
Infrastructure Investment;
Urban Transport;
Road Infrastructure
JEL code
D04 - Microeconomic Policy: Formulation, Implementation, and Evaluation;
H43 - Project Evaluation • Social Discount Rate;
L91 - Transportation: General;
O18 - Urban, Rural, Regional, and Transportation Analysis • Housing • Infrastructure
Country
Brazil
Category
Technical Notes
We evaluate the effects of municipal infrastructure upgrades on property prices in the Municipality of Campo Grande, Brazil. Using detailed administrative data on property characteristics and sales prices, we implement a differences-in-differences methodology that compares treated and comparison neighborhoods over time to estimate the effects of road infrastructure improvements and revitalization of urban parks. We find that road improvements are highly cost-effective, producing an increase of 6.1% in property prices which translate into a return of $4.25 per dollar invested. On the other hand, we find no effects of the urban parks intervention.
