Document Type

Working Paper

Publication Date



This working paper addresses differences in outcomes across households residing in slums and non-slum urban areas of India. We first established that if utility is defined as access to public goods such as water and sanitation, then residents in non-slum urban areas are unambiguously better off than slum dwellers. On the other hand, we found that the distribution of private goods (monthly per capita expenditure and per capita living area) in non-slum areas does not dominate the distribution of these goods in the slums, implying that non-slum residents are not unequivocally better off than slum residents. Since slums are on average poorer than other urban areas, it may be more pragmatic, therefore, to target policies at slum development. However, such policies would fail to reach the poorest residents of non-slum areas in both large and small cities. Our results make the case for a more inclusive policy that targets these groups as well.