IDEAS home Printed from https://ideas.repec.org/a/taf/nzecpp/v58y2024i1p20-39.html
   My bibliography  Save this article

Love thy neighbours or do ethnic neighbourhood qualities matter? Ethnic price differentials in a multi-ethnic housing market

Author

Listed:
  • Ka Shing Cheung
  • Chung Yim Yiu
  • Betty Peiying Lin

Abstract

New Zealand is a multi-ethnic society that embraces multiculturism. Many studies have examined how the concentration of ethnic minorities affects residential property values within small neighbourhoods. However, very few studies have recognised that characteristics of neighbourhoods other than ethnic concentration may cause such price differentials. We use the repeat-sales model, based on more than 66,000 housing transactions in the most ethnically diverse city in New Zealand, to control the unobserved biases and identify the effects of changes in the concentration of ethnic minorities on house prices over time. We argue that the commonly perceived ethnic housing price discount may not be a consequence of taste-based discrimination but statistical discrimination of prospective homebuyers on neighbourhood qualities. After controlling neighbourhood characteristics, which can be unobserved and are assumed to be unchanged over the course of the four censuses, the effect of the ethnic price differential, either increase or decrease, becomes insignificant on house prices. The statistical discrimination hypothesis is further confirmed using the Special Housing Area (SHA) as an exogenous amenity shock in a spatial-temporal differencing model. Using the conventional hedonic model without considering the neighbourhood qualities can be misleading.

Suggested Citation

  • Ka Shing Cheung & Chung Yim Yiu & Betty Peiying Lin, 2024. "Love thy neighbours or do ethnic neighbourhood qualities matter? Ethnic price differentials in a multi-ethnic housing market," New Zealand Economic Papers, Taylor & Francis Journals, vol. 58(1), pages 20-39, January.
  • Handle: RePEc:taf:nzecpp:v:58:y:2024:i:1:p:20-39
    DOI: 10.1080/00779954.2022.2137688
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/00779954.2022.2137688
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: https://libkey.io/10.1080/00779954.2022.2137688?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:nzecpp:v:58:y:2024:i:1:p:20-39. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: http://www.tandfonline.com/RNZP20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.