WPS4214 <mark>I</mark> MPACT <mark>E</mark> VALUATION <mark>S</mark> ERIES <mark>N</mark> O <mark>. 14</mark>

# **Housing, Health and Happiness**<sup>**_*_**</sup>

|Matias D.|Sebastian|Paul J.|Sebastian|Rocio|
|---|---|---|---|---|
|Cattaneo|Galiani|Gertler|Martinez|Titiunik|
|_UC Berkeley_|_Washington_|_UC Berkeley_|_World Bank_|_UC Berkeley_|
||_University in_<br>_St. Louis_||||

**Abstract:** Despite the importance of housing for people’s well-being, there is little evidence on the causal impact of housing and housing improvement programs on health and welfare. In this paper, we help to fill this gap by investigating the impact of a largescale effort by the Mexican Government to replace dirt floors with cement floors on child health and adult happiness. We find that replacing dirt floors with cement floors significantly improves the health of young children. Specifically, we find that a complete substitution of dirt floors by cement floors in a house leads to a 78 percent reduction in parasitic infestations, 49 percent reduction in diarrhea, 81 percent reduction in anemia and a 36 to 96 percent improvement in cognitive development. Additionally, we find that replacing dirt floors by cement floors significantly improves adult welfare, as measured by increased satisfaction with their housing and quality of life, as well as significantly lower rates of depression and perceived stress.

JEL: I12, I38 and H43. Keywords: Housing, Housing Programs, Health and Happiness.

World Bank Policy Research Working Paper 4214, April 2007 _The Impact Evaluation Series has been established in recognition of the importance of impact evaluation studies for World Bank operations and for development in general. The series serves as a vehicle for the dissemination of findings of those studies. Papers in this series are part of the Bank’s Policy Research Working Paper Series. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent._

*Cattaneo: Department of Economics, University of California at Berkeley, cattaneo@econ.berkeley.edu; Galiani: Department of Economics, Washington University in St. Louis, galiani@wustl.edu; Gertler: Haas Business School, University of California at Berkeley, gertler@haas.berkeley.edu; Martinez: The World Bank, smartinez@worldbank.org; Titiunik: Department of Agricultural and Resource Economics, University of California at Berkeley, rocio@are.berkeley.edu. We thank Albert Fishlow, Larry Katz, Ted Miguel, Norbert Schady, Jennifer Sturdy and seminar participants at the University of Columbia, University of Michigan, UC Berkeley, Toulouse and the World Bank for useful comments. We gratefully acknowledge support from the State of Coahuila, and thank Gustavo Olaiz, Ricardo Mujica, Gonzalo Hernandez and the Government of the State of Coahuila for their contribution to our understanding of the program and for helping us with our work in Mexico.