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Property rights and owner occupied housing investment in urban Ethiopia

Ziade Hailu (Makerere University Business School, Kampala, Uganda)
Gerrit Rooks (Eindhoven University of Technology, Eindhoven, Netherlands)

Property Management

ISSN: 0263-7472

Article publication date: 15 August 2016

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Abstract

Purpose

The purpose of this paper is to investigate whether the provision of formal land and building rights provides incentives to poor households to invest in their property in urban Ethiopia.

Design/methodology/approach

To test the hypothesis a natural quasi-experimental design was employed. Data were collected from a random sample of 210 households in a land formalization project and 190 households in a control group in Addis Ababa, Ethiopia. To control for selection bias propensity score matching was used to estimate group differences.

Findings

The beneficiary group reported a higher investment level than did the control group. Households in the beneficiary group are statistically more likely to invest in new structures and housing maintenance, yet these effects are modest.

Practical implications

Governments, donors, and land administration officials may use these findings to address contextual issues that need deliberate interventions to make formalization projects achieve its goals.

Originality/value

Property rights research is preoccupied with changes in land rights and its response to investment in agricultural sector. The paper contributes to the limited literature dealing with property rights literature on urban setting. Moreover, empirical research has been hampered by the problem of causality and endogeneity while the study is designed in such a way to respond to the selection problem utilizing a natural experiment.

Keywords

Citation

Hailu, Z. and Rooks, G. (2016), "Property rights and owner occupied housing investment in urban Ethiopia", Property Management, Vol. 34 No. 4, pp. 345-357. https://doi.org/10.1108/PM-08-2015-0038

Publisher

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Emerald Group Publishing Limited

Copyright © 2016, Emerald Group Publishing Limited