Subsidized home : ownership programs, transaction costs, and domestic violence

Abstract

We exploit the random assignment rule implemented by the government of the municipality of Salto (Argentina) in its program of social housing in order to identify the effect of the program on subsequent domestic violence. Beneficiaries receive a finished house in exchange for a long-term credit at a heavily subsidized rate, and are entitled to legal ownership after full payment. Using administrative records from the population of applicants, we find that subsidized home-ownership programs to low-income households are associated to an increase in reported domestic violence. We explore various potential mechanisms and we conclude that the empirical evidence only favors the mechanism of an increase in transaction costs associated to exiting a relationship.