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The decision on unconstitutionality of earmarking and its impact on the housing access: Evidence from São Paulo State, Brazil
Author(s) -
Barros Antunes Campos Rodger,
Serra Gustavo Pereira
Publication year - 2020
Publication title -
regional science policy and practice
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.342
H-Index - 8
ISSN - 1757-7802
DOI - 10.1111/rsp3.12180
Subject(s) - probit model , state (computer science) , economics , revenue , public economics , government (linguistics) , supreme court , probit , public administration , welfare economics , political science , law , econometrics , finance , mathematics , linguistics , philosophy , algorithm
Abstract In September of 1997 the Brazilian Supreme Court ruled unconstitutional the earmarking of tax revenues to public housing programme that was practised by the Government of the State of São Paulo. We explore this decision as an exogenous experiment to identify the impact of the earmarking prohibition on public housing deficit. We take advantage of the fact that the decision only affected the provision of public housing to households below a specific income threshold and estimate a difference‐in‐difference empirical model with probit estimators. Our results suggest that low‐income individuals faced an average decrease of 4.5% in the probability of living in a housing deficit condition after earmarking was revoked.