Estimating Ethnic Preferences Using Ethnic Housing Quotas in Singapore
Penn collection
Degree type
Discipline
Subject
housing
location choice
ethnic preferences
Economics
Real Estate
Funder
Grant number
License
Copyright date
Distributor
Related resources
Author
Contributor
Abstract
This paper estimates people’s taste for living with own-ethnic-group neighbors using variation from a natural experiment in Singapore: ethnic housing quotas. I develop a location choice model that informs the use of policy variation from the quotas to address endogeneity issues well-known in the social interactions literature. I assembled a dataset on neighborhood level ethnic proportions by matching more than 500,000 names in the phonebook to ethnicities. I find that all groups want to live with some own-ethnic-group neighbors but they also exhibit inverted U-shaped preferences so that once a neighborhood has enough own-ethnic-neighbors, they would rather add a new neighbor from other groups. Welfare simulations show that about 30% of the neighborhoods are within one standard deviation of the first best allocation of ethnic groups.