Spatial Spillovers from Urban Redevelopments: Evidence from Mumbai’s Textile Mills

Tuesday, March 29th, 2022
12:30 – 2:00 p.m. ET
via Zoom

This paper examines the effects of redeveloping central parts of developing country cities with high-rise, market rate buildings. We exploit a unique policy experiment in Mumbai that suddenly led 15% of central city land occupied by the city’s defunct textile mills to be redeveloped into high-rises during the 2000s. To measure the spatial spillovers from this new construction, we digitize a host of new spatially disaggregated administrative data and use machine vision and text classification techniques to measure changing slums and demographic composition nearby. We find evidence of sizable local spillovers that increase formal sector house prices and drive a process of gentrification where slums, low-skill population shares and informal employment all fall. To disentangle the source of these spillovers and quantify indirect and overall welfare effects, we develop and estimate a dynamic quantitative spatial model with informal floorspace, non-homothetic preferences and relocation frictions.

About the Speaker:

Nick Tsivanidis is an Assistant Professor in the Haas School of Business and the Department of Economics at the University of California at Berkeley. I am also Co-Director of the Cities Research Programme at the International Growth Centre (IGC). His interests lie across urban and spatial economics, development and applied macroeconomics. My research centers on connecting theory with empirics that combine new sources of granular data with natural experiments to learn about the process of urbanization in developing countries.