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Don't stand so close to me: the urban impact of immigration

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  • Antonio Accetturo

    ()
    (Bank of Italy)

  • Francesco Manaresi

    ()
    (Bank of Italy)

  • Sauro Mocetti

    ()
    (Bank of Italy)

  • Elisabetta Olivieri

    ()
    (Bank of Italy)

Abstract

We examine the impact of immigration on the residential market within urban areas. We develop a spatial equilibrium model that shows how the effect of an immigrant inflow in a district affects local housing prices through changes in how natives perceive the quality of their local amenities and how this influences their mobility. Predictions of the model are tested using a novel dataset on housing prices and population variables at the district level for a sample of 20 large Italian cities. To address endogeneity problems we adopt an instrumental variable strategy which uses historical enclaves of immigrants across districts to predict current settlements. We find that immigration raises average housing prices at the city level; however it reduces price growth in a district affected by an inflow vis-Ã -vis the rest of the city. This pattern is driven by the natives’ flight from immigrant-dense districts towards other areas of the city. These findings are consistent with native preferences to live in predominantly native areas.

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Bibliographic Info

Paper provided by Bank of Italy, Economic Research and International Relations Area in its series Temi di discussione (Economic working papers) with number 866.

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Date of creation: Apr 2012
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Handle: RePEc:bdi:wptemi:td_866_12

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Keywords: migration; housing; spatial segregation;

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  1. Albert Saiz & Susan Wachter, 2011. "Immigration and the Neighborhood," American Economic Journal: Economic Policy, American Economic Association, vol. 3(2), pages 169-88, May.
  2. Milo Bianchi & Paolo Buonanno & Paolo Pinotti, 2008. "Do immigrants cause crime?," PSE Working Papers halshs-00586864, HAL.
  3. Saiz, Albert, 2007. "Immigration and housing rents in American cities," Journal of Urban Economics, Elsevier, vol. 61(2), pages 345-371, March.
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Cited by:
  1. Christoph Basten & Cathérine Koch, 2014. "The causal effect of house prices on mortgage demand and mortgage supply," ECON - Working Papers 140, Department of Economics - University of Zurich.
  2. Diaz-Serrano, Luis & Raya, Josep M., 2014. "Mortgages, immigrants and discrimination: An analysis of the interest rates in Spain," Regional Science and Urban Economics, Elsevier, vol. 45(C), pages 22-32.

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