Quantitative and qualitative demand for slum and non-slum housing in Delhi: Empirical evidences from household data

This study estimates quantitative and qualitative demand for housing using household survey data in Delhi. Both housing demand and demand for housing attributes are further stratified by settlement type–slum and non-slum, and by tenure – owner and renter. The estimation results indicate that housing demand is inelastic with respect to price and income, whereas the magnitude of price elasticity is overall smaller than that of income elasticity in absolute term. In slum households, however, price elasticity is larger than income elasticity. The estimates of housing attributes also show that floor area, availability of a separate kitchen, permanent material of roof, independent latrine, drainage, and flat type of dwelling structure, among others, are important determinants of rent. In slum households, however, only quantity variables matter while quality variables have little effect on rent. This study concludes with policy prescriptions including sufficient urban land supply, which is required to cope with income growth of non-slum households on one hand and to provide low cost dwelling for slum household on the other hand.

► This study estimates demand for housing using household survey data in Delhi.
► Results show housing demand is inelastic with respect to price and income.
► The magnitude of price elasticity is smaller than income elasticity except in slum households.
► Determinant of rent varies in slum and non-slum households.
► Study recommends urban land supply and low cost dwelling for slum household.