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This study identifies how community attributes affect household residential location decisions in Medellin, Colombia. The empirical model applies the revealed preference principle: each household is assumed to have made an optimal location decision given a set of alternatives. Using household data, we estimate a conditional logit choice model for residential communities by controlling for both individual and neighborhood characteristics, including environmental attributes. The set of alternatives for each household are defined using the applicable neighborhood’s socioeconomic and geographic characteristics. The results provide an estimate of household preferences for the many characteristics of the potential choices in the choice set. In the case of Medellin, we found positive and significant preferences for public provided goods such as public schools and security but relatively low preferences for recreational and cultural spaces; households prefer that the latter be provided by the private sector.

This paper presents evidence of the ability of poor households in Colombia to insure consumption against idiosyncratic and covariate risks. Using longitudinal data from Familias en Acción (FA), a conditional cash transfer program (CCT) in Colombia, we test the predictions of the Pareto full risk-sharing model and estimate the parameters of a partial insurance model. Although we reject the hypothesis of full insurance, our results suggest there is a level of risk sharing in these communities, supporting the partial insurance model. In addition, we evaluate the effectiveness of FA as a risk management mechanism for beneficiary households. We find that the program serves not only as an instrument for consumption smoothing, but also for income smoothing. Particularly, FA is effective in protecting food consumption but not nonfood consumption, and it reduces consumption fluctuations in response to idiosyncratic shocks but not to covariate shocks.

Using a panel dataset from 1980 to 2000 this paper analyzes the determinants of income inequality in Latin American countries with special attention paid to education, health, and social security expenditures. I build on previous research by solving for the endogeneity of the social spending variables in the income inequality equation. This study undertakes 2SLS and GMM methods in order to control for the correlation of some of the regressors with the disturbance term. While government expenditure affects inequality, an increase in inequality may be related to social, economic and political changes that can also affect government expenditures. Therefore, social spending is potentially endogenous in the inequality regression and, unless this source of endogeneity is accounted for, the estimated parameters will be not consistent. Results show that social spending variables are endogenous with income inequality index. Once endogeneity is controlled for, education and health expenditures have a negative effect on income inequality, while social security expenditures have no effect on income inequality. I also find that models that do not take into account endogeneity of social spending variables overestimate the effects of education and health spending.

La regulación es un aspecto clave cuando un sector busca incrementar su eficiencia, lograr inversiones y mostrar sus procesos transparentes. Estos aspectos también llaman la atención en la gestión ambiental y se encuentra que es importante lograr una metodología que permita solucionar los diferentes problemas a los que el desarrollo económico ha conducido para el medio ambiente., 30 p.