The Role of Economic Development in Improvements of Cambodian Housing Conditions

Research by: Florian Gerth, and Karol S. Sikora

Executive Summary

In the process of economic development and improvements in the quality of life, the real-estate sector and housing conditions play a key role. This paper’s aim is to empirically analysis the statistical relationship between economic prosperity and variables capturing the real-estate sector, housing, socio-economic, legal, sanitary, and demographic characteristics in Cambodia for the years between 2010 and 2019.

In the past, investing in housing has served as an engine of growth for many economies as it is widely recognized that poor housing conditions can have significant negative impacts on human health, education, and economic opportunities. To assess the housing-related quality of life, indicators such as housing quality, housing environment, and cost burdens can be applied. However, recent studies indicate that materials used for construction are critical. Permanent materials, as opposed to temporary materials, typically offer a range of benefits in terms of durability, low maintenance, improved energy efficiency, increased property value, and better safety.

The ultimate aim of this paper is to empirically identify the key drivers of housing conditions in Cambodia, with a particular focus on materials and water quality, and the legal status of housing.

The main contributions of the paper are as follows:

1. Instead of relying on survey data, this present study conducts a thorough statistical analysis based on data collected and published by the Cambodian Bureau of Statistics.
2. To avoid capturing only a momentary snapshot of the empirical relationship between the variables involved, the paper relies on time-series modelling techniques in order to also take account of the time dimension and therefore possible dynamics between the variables.
3. Abstracting from the decision-making process of individuals within the Cambodian economy, we use macro data to be able to understand, and control for, the wider macroeconomic environment.
4. Last but not least, we identify the drivers of changes in housing conditions during the developing process as opposed to trying to explain the difference between heterogenous countries within a greater economic union as in previous studies.

To find the empirical relationship between economic, socio-economic, and demographic variables on the one hand, and variables measuring housing and living conditions in Cambodia on the other, the analysis employs Ordinary Least Squares and Methods-of-Moments regression modeling.

Results indicate that high employment rates and entrepreneurship increase home ownership and improve the quality of drinking water available. Furthermore, in addition to employment and entrepreneurship, the higher-performing construction materials can also be empirically explained by a bigger labor force and variables capturing the wider macroeconomic environment.

To cite this article:  Gerth, F., & Sikora, K. S. (2023). The role of economic development in improvements of Cambodian housing conditions. Journal of Regional Economics, 2(1), 1–13. https://doi.org/10.58567/jre02010001

To access this article: https://doi.org/10.58567/jre02010001

About the Journal

The Journal of Regional Economics (JRE) provides a focal point for the publication of research in the rapidly expanding field of regional economics. JRE welcomes theoretical and empirical papers that bring to bear careful analytical technique on important questions related to regional issues. The Journal encourages ground-breaking research in theoretical and applied regional economics, especially the analysis of innovation regional theory and hot regional issues.

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