Political Economy and Public Economics

Title: Residential Patterns and Local Public Goods in Urban Brazil

Abstract: Millions of migrants in developing countries move to urban areas in search of better prospects, but access to public services varies widely within cities. Yet, we know little about spatial inequalities within cities in low- and middle-income countries. This paper investigates the spatial distribution of socio-economic status and public goods access within Brazilian cities, using high-resolution Census maps. I consider spatial metrics of "distance segregation", capturing the physical proximity between neighborhoods of different socio-economic status. I document descriptive patterns of segregation by income, race, and informality and disparities in access to public goods within cities. To make progress on the identification of the impacts of residential patterns on public goods provision, I develop an instrumental variables strategy that leverages within-city geography to predict where the poor and rich live. I find that cities with greater distance between rich and poor have fewer households connected to sewerage and water, worse neighborhood quality, and lower access to public amenities. Leveraging spatial variation in public goods provision within cities, I highlight competing mechanisms that shape the allocation of urban services, including externalities across neighborhoods, strategic underprovision to deter the poor, and preferences over public goods provision. These findings help inform the debate on policies such as slum clearance and relocations, social housing, and the spatial targeting of public goods.