Working Paper #2013-061
Ethnic segregation and heterogeneous preferences of homeowners for housing and neighbourhood characteristics. Evidence from the Netherlands
This paper examines ethnically differentiated preferences for
neighbourhood ethnic composition 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.
- Keywords
-
- demand estimation
- hedonic price
- heterogeneous preference
- nonparametric
- generalized kernel function
- ethnic segregation
- JEL codes
-
- R20
- R21
- R23
- R31
- R32
Cite this as
APA 7th ed.Ong, C. B., & de Witte, K. (2013). Ethnic segregation and heterogeneous preferences of homeowners for housing and neighbourhood characteristics. Evidence from the Netherlands (UNU-MERIT Working Paper No. 2013-061). UNU-MERIT. https://unu-merit.nl/publications/working-papers/abstract/?id=5166