American Economic Journal: Economic Policy, February 2009, vol.1, iss.1, pp.75–105. Available From:Link to Source
This study examines the impact of Piso Firme, an intervention implemented by the Mexican government aimed at improving housing conditions in low-income neighbourhoods. Poor housing conditions undermine physical and mental health and have deleterious effects on childhood development. To address one factor contributing to poor housing conditions, Piso Firme provides up to 50 square metres of concrete cement flooring to households with dirt floors. This study examines the programme’s impact on child health, cognitive development and adult mental health.
This study uses a matching strategy to identify impact. The programme was initially implemented in the state of Coahuila, which includes the city of Torreon. This city is part of a larger metropolitan area that includes the cities of Gomez Palacio and Lerdo, which are located in the neighbouring state of Durango. Because of their close proximity, households in Torreon and the Durango cities are very similar in demographic characteristics and secular trends over time. However, at the time of the evaluation, households in Torreon had been offered the treatment, whilst households in the Durango cities had not. Using information from the 2000 national census and a minimum distance algorithm, the authors sampled census blocks matched on four characteristics in Torreon and the Durango cities: proportion of street blocks with dirt floors, proportion of households with dirt floors, number of children aged 0 to 5 years and number of households. From these census blocks, the authors randomly selected 1,500 households each from Torreon and the Durango cities for a survey measuring physical and mental health outcomes. Using this sample, the authors conduct an intent-to-treat analysis comparing physical and mental health outcomes in Torreon and the Durango cities. To this end, the authors estimate a series of linear regression models including dummies indicating the household’s location in either Torreon or the Durango cities.
This study’s main finding is that Piso Firme led to significant improvements in child health, cognitive development and adult mental health and happiness. First, with respect to child health, the intervention was associated with a 19.6 percentage point reduction in parasitic infections, a 1.8-point decrease diarrhoea and a 20.1-point reduction in anaemia. Second, with respect to childhood cognitive development, children in the treated cities scored 30.2 per cent higher on a standardised test of language and communication skills than children in the non-treated cities. Children in the treated cities also showed an increase in performance on a standardised vocabulary test of about 9 per cent relative to children in the control cities. Third, with respect to adult mental health and happiness, mothers in the treated cities scored 12.5 and 10.6 per cent lower on depression and perceived stress scales, respectively, than mothers in the control cities. Furthermore, satisfaction with quality of life was 18.7 per cent higher amongst mothers in the treated cities.
From a policy perspective, this study’s findings suggest that improvements in housing conditions can have significant positive effects on physical and mental health and wellbeing in poor households. Furthermore, replacing dirt floors with cement floors appears to be highly cost effective in comparison with other interventions. For example, Piso Firme, a one-time US$150 per household expenditure, yields a 9 per cent increase in scores on a standardised vocabulary test; conversely, Mexico’s Oportunidades programme yields a 12 per cent increase on the same test but at a cost of between US$210 and US$750 per household over 2 years. Finally, this study’s findings suggest that improving housing conditions can complement and improve the effectiveness of other interventions, such as distributing de-worming medicine, that aim to improve childhood health.