Property rights and household income among the urban poor in Luanda, Angola

Abstract

The theory that property rights increase household income among low-income households is widely acknowledged, yet empirical studies find scarce evidence of this effect. These studies encounter theoretical deficiencies and methodological challenges of endogeneity and selection bias in making causal inference. This paper examines effects of property rights on income using a control group design and propensity score matching. It employs the continuum of property rights as a conceptual framework, applying it to the case of Zango I social housing project and Paraiso, a slum, in Luanda. Results show the likelihood that property rights increase tenure security and income through the mechanism of home business activities but not through labour market participation or credit access. In contexts where housing projects for low-income groups depend on the informal sector and are located far from city centres, home business activities can be an important mechanism through which property rights may alleviate poverty.