Cities in developing countries are growing at extraordinary rates, often compressing into decades the urbanization process that has taken centuries in developed countries. In coping with this growth, public authorities have devised a wide range of policy instruments to influence the rate and character of city expansion, to meet the needs of people for shelter and urban services, and to allocate resources in ways that redistribute both the costs and benefits of urban growth. Ideally, such policy formulation should be informed by a careful understanding of the behavior of urban markets; in fact, little information on market behavior is available to the policymakers of developing countries. Such basic information is needed for improved project design and, even more important, for improved sector-wide policies.