Slums in developing countries: New evidence for Indonesia

•Research on link between household characteristics and chosen housing attributes is scarce.•Question: what types of households select dwellings with slum-like attributes?•Paper provides answer for Indonesia, using data from 1993 Indonesian Family Life Survey.

This paper uses Indonesian data to provide new evidence on the links between household and dwelling characteristics in a developing country. The results show that higher income and education lead to occupancy of dwellings with better structural characteristics, an effect that is reinforced if the household is large and contains few children. Religion also matters, with non-Buddhist households occupying dwellings with worse structural characteristics. The directions of these effects are mostly consistent with separate estimates of household bid-rent functions, which show that willingness-to-pay for better housing attributes rises with income and education.