of housing finance depth to reduce inequality is multiplied when it is combined with voice and accountability and with wealth, legal, and Sahel dummies. Our previous decomposition is therefore relevant in the analysis of the capacity of housing finance to reduce inequality.

Impact of housing finance on inclusive growth

**Table 4.3:** Impact of Housing Finance on Per Capita Economic Growth (GDPPC) and Economic Growth (GDP)

||**GDPPC (1)**|**GDP**|**GDPPC (2)**|**GDPPC (3)**|**GDPPC (4)**|
|---|---|---|---|---|---|
|Housing finance depth|**0.365****|**2.25****|11.56|79.85|0.009|
||**(1.44)**|**(1.11)**|(15.43)|(86.3)|(0.007)|
|Housing finance policy|0.009|**0.002*****|0.009|0.01|0.007|
||(0.007)|**(0.0003)**|(0.007)|(0.007)|(0.007)|
|Population 15-64|**3.56****|**-1.63****|**3.64****|**3.53****|**3.56****|
||**(1.39)**|**(0.777)**|**(1.4)**|**(1.39)**|**(1.4)**|
|Investment stock|**0.717*****|-0.013|**0.718*****|**0.72*****|**0.72*****|
||**(0.097)**|(0.042)|**(0.097)**|**(0.097)**|**(0.097)**|
|Human capital|**0.013****|**---**|**0.012****|**0.013****|**0.013****|
||**(0.004)**||**(0.004)**|**(0.004)**|**(0.004)**|
|Trade openness|**-0.012*****|**-0.007*****|**-0.012*****|**-0.012*****|**-0.012*****|
||**(0.0014)**|**(0.001)**|**(0.001)**|**(0.001)**|**(0.001)**|
|Conflict dummy t-1|0.109|---|0.089|0.12|0.109|
||(0.117)||(0.119)|(0.117)|(0.117)|
|Infrastructure (Electricity)|**0.015****|**0.002****|**0.016****|**0.002****|**0.022****|
||**(0.0047)**|**(0.002)**|**(0.005)**|**(0.005)**|**(0.005)**|
|Inflation|-0.002|---|-0.002|-0.002|-0.002|
||(0.008)||(0.008)|(0.008)|(0.008)|
|Interest rate|-0.002|---|-0.002|-0.003|-0.002|
||(0.006)||(0.006)|(0.006)|(0.006)|
|Transfers|1.1e-17|---|1.2e-17|1.2e-17|1.1e-17|
||(1.8e-17)||(1.8e-17)|(1.8e-17)|(1.8e-17)|
|Domestic credit to private sector|-0.011|---|-0.01|-0.01|-0.011|
||(0.007)||(0.007)|(0.007)|(0.007)|
|Hfinwealth|---|**---**|-5.98|**---**|**---**|
||||(7.702)|||
|Hfinlegal|---|---|---|-80.28<br>(6.94)|**---**|
|Hfinsahel|---|**---**|---|**---**|-0.365<br>(1.44)|
|Constant|-23.06**|19.04***|-23.43**|-22.9**|-23.06**|
||(6.96)|(3.34)|(6.96)|(6.94)|(6.96)|
|Countries|45|45|45|45|45|
|Observations|188|500|188|188|188|

_Source_ : Authors estimates.

_Note_ : Kaotrop (Financial openness*Trade openness); Hfinwealth (Housing finance depth*Wealth- _dummy_ : wealth-based decomposition); Hfinlegal (Housing finance depth*Legal- _dummy_ : Legal-based decomposition-); Hfinsahel (Housing finance depth*Sahel- _dummy_ : Sahel-based decomposition-). *,**,**: significance levels of 10%, 5% and 1% respectively. Values in brackets are standard errors.

From table 4.3 above, we can see that housing finance depth has a positive and significant impact (5 percent level) on GDP per capita growth and GDP growth in Africa. This result confirms that the development of housing finance is relevant to the pursuit of inclusive growth objectives. The impact is expected to be higher on economic growth than on per capita economic growth. Interestingly, our results imply that for every 100 dollars spent on housing finance activities in Africa, 36.5 dollars are added to per capita GDP while 225 dollars are added to GDP. This result confirms the findings of Hongyu et al. (2002), Erbas and Nofthaft 17