Pollution, Crime, and Mistrust Across Space: Evidence from Sub-Saharan Africa
Striking differences in living standards between urban and rural areas in low income countries pose a puzzle for growth economists. In a conventional spatial equilibrium model, utility is assumed to be equal across locations; otherwise an individual would have an incentive to move. Whether disamenities compensate individuals for the higher standard of living in urban areas remains largely untested. This paper asks whether the spatial distribution of key disamenities can explain the observed differences in living standards in Sub-Saharan Africa. I construct a new dataset that links geo-located household surveys on crime, mistrust, living conditions, and satellite-derived measures of pollution with gridded population density data. This allows me to view outcomes through the lens of population density in addition to a traditional urban/rural distinction. I reject the possibility that pollution is a key disamenity of high population density areas in the twenty African countries in my sample, but the evidence supports the notion that crime and mistrust are indeed higher in denser areas. However, the magnitudes of these effects are small compared to the differences in living standards, suggesting that these variables do not offset measured differences in income, wages, or living conditions. The results call into question the usefulness of spatial equilibrium concepts for Sub-Saharan Africa.