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The London Bombings and Racial Prejudice: Evidence from Housing and Labour Markets

Author

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  • Anita Ratcliffe

    (Department of Economics, The University of Sheffield)

  • Stephanie von Hinke Kessler Scholder

    (University of York)

Abstract

This paper investigates the impact of the London bombings on attitudes towards ethnic minorities, examining outcomes in housing and labour markets across London boroughs. We use a difference-in-differences approach, specifying `treated' boroughs as those with the highest concentration of Asian residents. Our results indicate that house prices in treated boroughs fell by approximately 2.3% in the two years after the bombings relative to other boroughs, with sales declining by approximately 5.7%. Furthermore, we present evidence of a rise in the unemployment rate in treated compared to control boroughs, as well as a rise in racial segregation. These results are robust to several `falsification' checks with respect to the definition and timing of treatment.

Suggested Citation

  • Anita Ratcliffe & Stephanie von Hinke Kessler Scholder, 2013. "The London Bombings and Racial Prejudice: Evidence from Housing and Labour Markets," Working Papers 2013013, The University of Sheffield, Department of Economics.
    • Handle: RePEc:shf:wpaper:2013013
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    14. Eric D. Gould & Esteban F. Klor, 2016. "The Long‐run Effect of 9/11: Terrorism, Backlash, and the Assimilation of Muslim Immigrants in the West," Economic Journal, Royal Economic Society, vol. 126(597), pages 2064-2114, November.
    15. Nils Braakmann, 2010. "Islamistic Terror And The Labour Market Prospects Of Arab Men In England: Does A Country'S Direct Involvement Matter?," Scottish Journal of Political Economy, Scottish Economic Society, vol. 57(4), pages 430-454, September.
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    Cited by:

    1. Paresh Kumar Narayan & Seema Narayan & Siroos Khademalomoom & Dinh Hoang Bach Phan, 2018. "Do Terrorist Attacks Impact Exchange Rate Behavior? New International Evidence," Economic Inquiry, Western Economic Association International, vol. 56(1), pages 547-561, January.
    2. Lepage, Louis-Pierre, 2023. "Discrimination and sorting in the real estate market: Evidence from terrorist attacks and mosques," European Economic Review, Elsevier, vol. 153(C).
    3. Marco Giani & Luca Paolo Merlino, 2021. "Terrorist attacks and minority perceived discrimination," ULB Institutional Repository 2013/351080, ULB -- Universite Libre de Bruxelles.
    4. Arne Risa Hole & Anita Ratcliffe, 2020. "The Impact of the London Bombings on the Well‐Being of Adolescent Muslims," Scandinavian Journal of Economics, Wiley Blackwell, vol. 122(4), pages 1606-1639, October.
    5. Muñoz-Morales, Juan & Singh, Ruchi, 2023. "Do school shootings erode property values?," Regional Science and Urban Economics, Elsevier, vol. 98(C).
    6. Nowak, Adam & Sayago-Gomez, Juan, 2018. "Homeowner preferences after September 11th, a microdata approach," Regional Science and Urban Economics, Elsevier, vol. 70(C), pages 330-351.
    7. Nils Verheuvel & Joost Witteman & Marilou Vlaanderen, 2023. "Synthetic Control Method for Dutch Policy Evaluation," De Economist, Springer, vol. 171(1), pages 51-83, March.
    8. Brodeur, Abel & Yousaf, Hasin, 2022. "On the Economic Consequences of Mass Shootings," GLO Discussion Paper Series 1133, Global Labor Organization (GLO).
    9. Arne Risa Hole & Anita Ratcliffe, 2015. "The impact of the London bombings on the wellbeing of young Muslims," Working Papers 2015002, The University of Sheffield, Department of Economics.
    10. Lei Zhang & Tammy Leonard, 2021. "External validity of hedonic price estimates: Heterogeneity in the price discount associated with having Black and Hispanic neighbors," Journal of Regional Science, Wiley Blackwell, vol. 61(1), pages 62-85, January.
    11. Brodeur, Abel & Wright, Taylor, 2019. "Terrorism, immigration and asylum approval," Journal of Economic Behavior & Organization, Elsevier, vol. 168(C), pages 119-131.
    12. Sander WAGNER & Ivaylo D. PETEV, 2019. "The Economic Penalty of Terrorism: Increase in Discrimination Against Arabs and Muslims after Paris Attacks," Working Papers 2019-22, Center for Research in Economics and Statistics.
    13. Brendon McConnell & Kegon Teng Kok Tan & Mariyana Zapryanova, 2023. "How do Parole Boards Respond to Large, Societal Shocks? Evidence from the 9/11 Terrorist Attacks," Working Papers 2023-010, Human Capital and Economic Opportunity Working Group.
    14. Tripathi, Ishita, 2022. "Are terrorists responsible for anti-immigrant sentiments? Evidence from Europe," Economic Modelling, Elsevier, vol. 115(C).
    15. van Duijn, Mark & Rouwendal, Jan & Boersema, Richard, 2016. "Redevelopment of industrial heritage: Insights into external effects on house prices," Regional Science and Urban Economics, Elsevier, vol. 57(C), pages 91-107.

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    More about this item

    Keywords

    terrorism; racial prejudice; difference-in-differences;
    All these keywords.

    JEL classification:

    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

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