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Modeling urban housing market dynamics: Can the socio-spatial segregation preserve some social diversity?

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  • Gauvin, Laetitia
  • Vignes, Annick
  • Nadal, Jean-Pierre

Abstract

Addressing issues of social diversity, we introduce a model of housing transactions between agents who are heterogeneous in their willingness to pay. A key assumption is that agents' preferences for a location depend on both an intrinsic attractiveness and on the social characteristics of the neighborhood. The stationary space distribution of income is analytically and numerically characterized. The main results are that socio-spatial segregation occurs if – and only if – the social influence is strong enough, but even so, some social diversity is preserved at most locations. Comparison with data on the Paris housing market shows that the results reproduce general trends of price distribution and spatial income segregation.

Suggested Citation

  • Gauvin, Laetitia & Vignes, Annick & Nadal, Jean-Pierre, 2013. "Modeling urban housing market dynamics: Can the socio-spatial segregation preserve some social diversity?," Journal of Economic Dynamics and Control, Elsevier, vol. 37(7), pages 1300-1321.
    • Handle: RePEc:eee:dyncon:v:37:y:2013:i:7:p:1300-1321
    DOI: 10.1016/j.jedc.2013.03.001
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    Cited by:

    1. Gerard Ballot & Antoine Mandel & Annick Vignes, 2015. "Agent-based modeling and economic theory: where do we stand?," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 10(2), pages 199-220, October.
    2. Dimitry Rtischev, 2020. "Competing to belong and working to pay for it: a socioeconomic model of the link between productivity and work-life balance," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 67(4), pages 533-548, December.
    3. Pangallo, Marco & Nadal, Jean-Pierre & Vignes, Annick, 2019. "Residential income segregation: A behavioral model of the housing market," Journal of Economic Behavior & Organization, Elsevier, vol. 159(C), pages 15-35.
    4. Caridi, I. & Pinasco, J.P. & Saintier, N. & Schiaffino, P., 2017. "Characterizing segregation in the Schelling–Voter model," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 487(C), pages 125-142.
    5. Takao Hishikawa & Jun-ichi Inoue, 2014. "Probabilistic flows of inhabitants in urban areas and self-organization in housing markets," Papers 1406.6100, arXiv.org.

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    More about this item

    Keywords

    Housing market model; Income segregation; Social diversity; Agent-based model;
    All these keywords.

    JEL classification:

    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques

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