Date of this Version
The Review of Economic Studies
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.
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
Residential Segregation, housing, location choice, ethnic preferences
Wong, M. (2013). Estimating Ethnic Preferences Using Ethnic Housing Quotas in Singapore. The Review of Economic Studies, 80 (3), 1178-1214. http://dx.doi.org/10.1093/restud/rdt002
Date Posted: 27 November 2017
This document has been peer reviewed.