# **4.2 Access to jobs and rents**

A job density proxy was measured based on spatial data of the economic activity distribution (Barzin et al., 2022) and added to the model to assess the relationship between rent and access to jobs. Better access to jobs tends to be associated with higher rents and housing costs so it is therefore assumed that _α_ ˆ2 _>_ 0 in Equation (1). Figure 5 presents the value of the marginal effects of job density on rents in percentage, based on estimations including the variable exposure to actual floods (Appendix Tables C.1 to C.4, column (7)).

In Accra and Addis Ababa, areas with higher job density are associated with lower rents. These results are contrary to our hypothesis. In Accra, while some expensive dwellings located in the northeast of the Accra district, have relatively high job density, many households living in more expensive dwellings in the south-west have relatively low access to jobs. These households in the south-west could be driving the results (Appendix Figure D.1).

In the case of Addis Ababa, the highest job density is around the Ketema district, a populous area with low rents and improvised settlements, that means rents are lower in the economic center, and higher in the periphery. Two of the richest locations in Addis Ababa are close to the airport, and close to the African Union, respectively two and one hours travel time from the economic center (see Appendix Figure D.4).

In Dar es Salaam, the relationship between job density and rents is also negative but not statistically significant.

In Antananarivo, areas with high job density have higher rents, on average. WB (2017) also found that rents close to the city center were higher. The result is intuitive also since Antananarivo is a relatively monocentric city, where jobs are concentrated in the center (see Figure D.2) Since the variable we use to measure job density is non dimensional, it is difficult to interpret a marginal increase, but the results show that the relative importance of job density on rents is highest in Accra compared to the other three cities.

To check for a relationship between flood risk and access to jobs, we interact the proxy for job density with the variables measuring flood risk for each city (Appendix Tables C.1 to C.4, columns (5) and (6)). The negative effect of job density on rents is higher (in absolute value) when flood risk is high in Accra and Addis Ababa, and the positive effect of job density on rents becomes negative when flood risk is high in Antananarivo.<sup>11</sup> The relationship is not found in Dar es Salaam. This finding seems to suggest that access to jobs is an important factor driving people to settle in flood-prone areas since residents in all but one city face a significant discount when renting dwellings in flood-prone areas that are also close to job opportunities. Kocornik-Mina et al. (2020) analyze large urban floods in 40 countries, mostly developing countries, and find that low elevation areas experience flooding more frequently and that they also concentrate a higher density of economic activities.

However, the findings also show that job density is linked to lower rents in three of the four cities studied (although in Dar es Salaam the result is not significant), indicating that the most economically active areas are not necessarily the most attractive for households. While the job density proxy is based on access to amenities, services, and infrastructure, it does not account for the quality of the same, which 11A Wald test for the joint significance of the interaction term was conducted; the only non- statistically significant interaction term was for Dar es Salaam, for the interaction between job density and actual flood exposure (Appendix Table C.3, column(5)).

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