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Ethnic segregation and heterogeneous preferences of homeowners for housing and neighbourhood characteristics : evidence from the Netherlands

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  • Ong C.
  • Witte K. de

    (UNU-MERIT)

Abstract

This paper examines ethnically differentiated preferences for neighbourhood ethniccomposition among homeowners in the Netherlands. Borrowing from price hedonic theory, it tests a fully nonparametric empirical model of housing choice. We exploit rich neighbourhood-level administrative data linked to the 2009 Dutch Housing and Living Survey. The nonparametric analysis proceeds in two steps. First, housing prices are decomposed into attribute-specific implicit prices. These price hedonic estimates indicate a significant negative effect of the percentage of non-western minority residents in a neighbourhood on housing prices. For the second step and using the recovered household preference parameters, the marginal willingness to pay for an increase in non-western minority neighbours is estimated. Our model predicts an average decrease in dwelling price of 697 for every 10 per cent increase in non-western neighbours. The paper finds evidence of assimilation with some homeowners of non-western migrant background having a negative willingness to pay for living next to more co-ethnic neighbours.

Suggested Citation

  • Ong C. & Witte K. de, 2013. "Ethnic segregation and heterogeneous preferences of homeowners for housing and neighbourhood characteristics : evidence from the Netherlands," MERIT Working Papers 2013-061, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    • Handle: RePEc:unm:unumer:2013061
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    Cited by:

    1. Ong, C., 2014. "Tipping points? Ethnic composition change in Dutch big city neighbourhoods," MERIT Working Papers 2014-011, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    2. Cheng Boon Ong, 2017. "Tipping points in Dutch big city neighbourhoods," Urban Studies, Urban Studies Journal Limited, vol. 54(4), pages 1016-1037, March.

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    More about this item

    Keywords

    Household Analysis; Housing Demand; Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics; Housing Supply and Markets;
    All these keywords.

    JEL classification:

    • R20 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - General
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis

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