No Place Like Home? Causal Effects of Being Displaced from Central Slums in Addis Ababa

Abstract
We study the economic consequences of large-scale evictions of slum areas in the centre of Addis Ababa. Using a spatial regression discontinuity (RDD) approach, and rich primary survey data collected before and after 40,000 households were evicted from 20 different neighbourhoods, we estimate the effect of being evicted on evicted households and spillovers to non-evicted households nearby. We use extensive data on social networks, housing amenities, local amenities and travel times, and combine it with model-based money metrics to understand the welfare effects of evictions. Although households live considerably further from the city centre after their eviction, we find that they move to better neighbours with better amenities and housing quality. We can rule out large effects on household earnings and consumption. Turning to spillovers from exposure}to nearby evictions for households that were not evicted, we find reductions in neighbourhood quality and social networks. Correcting the RDD results for this SUTVA violation changes the magnitude but not the sign of our main estimates, suggesting that failing to account for spillovers would have painted a too-positive picture of the effects of being evicted. We discuss how different types of compensation provided to evicted households drive our results.