Since 2005, Ethiopia has been implementing a large-scale housing program which aims to
reduce the housing supply shortage and improve the living standard of the urban low and middle
income households through the construction of high-rise condominium houses equipped with
basic services. This paper evaluates the impact of the condominium housing program on the
welfare of the beneficiary households using a cross-sectional data from a sample of 335
households who applied for the houses, in Mekelle city.
To account for the selection bias due to differences in observable characteristics the PSM
method is used. Moreover, to check the robustness of the impact estimates sensitivity analysis is
applied.
The result shows that the program has a positive significant impact on wealth of household,
approximated by a wealth index including housing quality, use of consumer durables and access
to services, and on annual total education expense of households per attending child. The wealth
index and the annual total education expense per attending child of the beneficiary households
have increased by 0.23 to 0.25 and by Birr 502 to Birr 641, respectively. However, there is no
statistically significant evidence as whether the program affects the other welfare indicators
(monthly per capita food expenditure, incidence of sickness and children’s educational
attainment, as explained by highest level of children’s schooling and by the proportion of school
age children attending school). The sensitivity analysis on the significant outcome indicators
shows that the estimations are robust to deviations from the identifying CIA assumption.