Housing Externalities and Expectation Channel : A Quasi-Experiment Using Public Housing Upgrading Programs

The paper examines differences in housing externalities across regions with different political affiliations. Using a merged dataset containing data on public housing upgrading, resale public housing transactions, electoral boundaries and election results from 2010 to 2016 and a differences-in-discontinuity approach, we find evidence that public housing programs are expedited in ruling-party-held wards in periods leading up to the general elections relative to contesting wards. We also find that the unbalanced provision of upgrading programs leads to higher housing externalities for housing blocks in ruling-party-held wards than those for otherwise similar blocks in contesting wards. This paper provides new evidence on the expectation channel through which housing externalities may be affected