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Stratification and public utility services in Colombia: subsidies to households or distortion of housing prices?

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dc.description.abstract Domiciliary public utility services in Colombia have a cross subsidy system which charges subsidized rates to the households who live in houses located in strata associated to low wealth levels, and taxed rates to the better off. We assesses the hypothesis that the flow of subsidies that potentially come from a particular house, are discounted by housing market agents so that most of them are transferred to the prices of the houses that generate the subsidies. By estimating a hedonic prices model applying a regression discontinuity approach, we find that the increment in house value estimated because of subsidies is similar in magnitude to the present value of the flow of subsidies. Likely effects are found on the rent amount. We conclude that subsidies to the poor population through public spending in domiciliary public utility services in Colombia is being achieved, if anything, in a very limited way. Most of the financial effort on this subject ends up distorting housing relative prices according to socioeconomic strata, with an annual cost of up to 0.7% of GDP in supposed gross subsidies to domiciliary public utility services en
dc.title Stratification and public utility services in Colombia: subsidies to households or distortion of housing prices? en
dc.contributor.author Medina, Carlos
dc.contributor.author Morales, Leonardo
dc.date.accessioned 2014-11-17T21:08:55Z
dc.date.available 2014-11-17T21:08:55Z
dc.date.issued 2007-03
dc.identifier.issn 1529-7470
dc.identifier.uri http://hdl.handle.net/123456789/48759
lacea.language.supported en
dc.language.iso en
dc.publisher Brookings Institution Press
dc.subject Targeting of subsidies
dc.subject Stratification
dc.subject Segregation
dc.subject Public utilities
dc.subject Colombia
dc.type Article


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