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Estimating Neighborhood Choice Models: Lessons from a Housing Assistance Experiment

Author

Listed:
  • Sebastian Galiani
  • Alvin Murphy
  • Juan Pantano

Abstract

We use data from a housing-assistance experiment to estimate a model of neighborhood choice. The experimental variation effectively randomizes the rents which households face and helps identify a key structural parameter. Access to two randomly selected treatment groups and a control group allows for out-of-sample validation of the model. We simulate the effects of changing the subsidy-use constraints implemented in the actual experiment. We find that restricting subsidies to even lower poverty neighborhoods would substantially reduce take-up and actually increase average exposure to poverty. Furthermore, adding restrictions based on neighborhood racial composition would not change average exposure to either race or poverty. (JEL I32, I38, R23, R38)

Suggested Citation

  • Sebastian Galiani & Alvin Murphy & Juan Pantano, 2015. "Estimating Neighborhood Choice Models: Lessons from a Housing Assistance Experiment," American Economic Review, American Economic Association, vol. 105(11), pages 3385-3415, November.
    • Handle: RePEc:aea:aecrev:v:105:y:2015:i:11:p:3385-3415
    Note: DOI: 10.1257/aer.20120737
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    References listed on IDEAS

    as
    1. Dionissi Aliprantis, 2011. "Assessing the evidence on neighborhood effects from moving to opportunity," Working Papers (Old Series) 1101, Federal Reserve Bank of Cleveland.
    2. Patrick Bayer & Fernando Ferreira & Robert McMillan, 2007. "A Unified Framework for Measuring Preferences for Schools and Neighborhoods," Journal of Political Economy, University of Chicago Press, vol. 115(4), pages 588-638, August.
    3. Orazio P. Attanasio & Costas Meghir & Ana Santiago, 2012. "Education Choices in Mexico: Using a Structural Model and a Randomized Experiment to Evaluate PROGRESA," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 79(1), pages 37-66.
    4. Bayer, Patrick & Keohane, Nathaniel & Timmins, Christopher, 2009. "Migration and hedonic valuation: The case of air quality," Journal of Environmental Economics and Management, Elsevier, vol. 58(1), pages 1-14, July.
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    More about this item

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy

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