Abstract
Rapid urban expansion in Sub-Saharan Africa has pushed low-income households into informal settlements located in areas increasingly exposed to coastal flooding and landslides. Freetown, Sierra Leone exemplifies this challenge: large informal neighborhoods occupy low-lying coastal zones that face severe seasonal flooding, yet previous government relocation efforts—typically top-down, peripheral, and poorly aligned with residents’ preferences—have largely failed. This project provides the first integrated empirical and structural assessment of whether, and how, governments should facilitate the voluntary relocation of households living in high-risk informal settlements.
We proceed in four steps. First, we quantify the economic, health, and fiscal costs of recurrent flooding by combining a novel panel survey of 3,000 households with administrative expenditure data and high-frequency water-level monitors installed across at-risk communities. Second, we implement a spatially conditional housing-subsidy experiment to estimate household preferences over housing and neighborhood attributes. Through a Multiple Price List design, households choose between remaining in their current dwelling or relocating to safer neighborhoods under varying subsidy levels, enabling us to identify the minimum compensation required to induce voluntary movement and the heterogeneity in these thresholds. Third, we use randomized subsidy offers and a follow-up panel to estimate the causal impacts of relocation on economic outcomes, health, and human capital. Finally, we study how to prevent re-encroachment of vacated land. We elicit community leaders’ willingness to enforce no-build zones and combine these data with relocation impacts and compensation costs in a dynamic quantitative spatial model tailored to a low-income, high-informality context.
Together, the project will generate the first evidence on the welfare gains from relocating households away from climate-vulnerable areas and the policy instruments most likely to achieve sustained, voluntary reductions in exposure.