Real Estate Papers

Document Type

Journal Article

Date of this Version

2013

Publication Source

The Review of Economic Studies

Volume

80

Issue

3

Start Page

1178

Last Page

1214

DOI

10.1093/restud/rdt002

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.

Copyright/Permission Statement

This is a pre-copyedited, author-produced PDF of an article accepted for publication in The Review of Economic Studies following peer review. The version of record is available online at: http://restud.oxfordjournals.org/content/early/2013/01/10/restud.rdt002.full.pdf+html

Keywords

Residential Segregation, housing, location choice, ethnic preferences

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Date Posted: 27 November 2017

This document has been peer reviewed.