Abstract:

This thesis studies three different issues in development economics. The first chapter is solely authored, as well as the appendix to the second chapter. The second and third chapters are coauthored with a former Princeton graduate student, Climent Quintana-Domeque, who graduated in 2008.

In the first chapter, I argue that knowledge of the extent of crime displacement is crucial for the design and implementation of crime prevention policies. Nevertheless, previous empirical evidence documenting displacement remains inconclusive. The chapter is the first to document extensive interstate displacement in auto theft. I propose an intuitive model to analyze the effects in the stolen vehicle market of the introduction of an observable theft deterrence device. I then study the changes in theft risk that were generated by the introduction of Lojack, a highly effective stolen vehicle recovery device, into a number of new Ford car models in some Mexican states, but not others. I find that Lojack-equipped vehicles in Lojack coverage states experienced a 48% reduction in theft risk due to deterrence effects. In states neighboring those where Lojack was introduced, I find that the Lojack program generated an increase in theft risk of 77% in unprotected Ford models. This kind of externality is expected when there is a strong model-specific demand for stolen cars--such as an active stolen autoparts market. In Lojack states, I find a small and non-significant reduction in theft risk of unprotected car models which coincides with the introduction of the Lojack program. The Lojack program introduction coincides with an increase in the number of criminals charged for property theft in Lojack states. I find no displacement to other crime categories in either Lojack or Non Lojack states. Given that most criminal law enforcement is an attribute of state or local governments, the results of this chapter suggest that prevention efforts targeting highly mobile crimes--like auto theft--should be coordinated among jurisdictions, rather than independently designed.

The second chapter describes the design of an experiment in infrastructure provision in Mexico. The treatment consisted of randomly allocating a combination of pavement, tap water and sewerage to street projects--defined as contiguous sets of city blocks connecting to the city's pavement grid--in a Mexican city. The chapter describes the experiment, the measurement instruments, provides descriptive statistics from the baseline survey, tests of equality of means between treatment and control groups using the baseline survey, and preliminary results using the follow up survey. The preliminary results suggest that treated households have higher income, expenditures, and SRHS. Treated households also seem to have better access to credit, and are more likely to own a pickup truck and have bought construction materials for home improvement.

The third chapter is the first analysis, in the context of a developing country, of the reliability of home owner estimates of the market price of their property, as obtained via a household survey. The analysis suggests first that non-response to this question is uncorrelated with the appraised value of the house. Second, homeowners with long tenure largely overestimate the value of their home. However, families with short tenure make reasonably accurate and unbiased estimates of the value of their home, similar to what is found in the U.S. literature. Third, those who, instead of self building their homes, acquire a completed house from a developer make unbiased and very precise estimates of their home's value. Finally, the error and precision of the home value estimates do not seem to be correlated with socioeconomic characteristics. In an empirical application, we establish that using short-tenure homeowners' estimates of home value gives unbiased and reasonably accurate estimates of average home value at the census tract level.