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Immigration and the neighborhood

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  • Albert Saiz
  • Susan Wachter

Abstract

What impact does immigration have on neighborhood dynamics? Within metropolitan areas, the authors find that housing values have grown relatively more slowly in neighborhoods of immigrant settlement. They propose three nonexclusive explanations: changes in housing quality, reverse causality, or the hypothesis that natives find immigrant neighbors relatively less attractive (native flight). To instrument for the actual number of new immigrants, the authors deploy a geographic diffusion model that predicts the number of new immigrants in a neighborhood using lagged densities of the foreign-born in surrounding neighborhoods. Subject to the validity of their instruments, the evidence is consistent with a causal interpretation of an impact from growing immigration density to native flight and relatively slower housing price appreciation. Further evidence indicates that these results may be driven more by the demand for residential segregation based on race and education than by foreignness per se.

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Paper provided by Federal Reserve Bank of Philadelphia in its series Working Papers with number 06-22.

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Date of creation: 2006
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Handle: RePEc:fip:fedpwp:06-22

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Keywords: Immigrants;

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Citations

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Cited by:
  1. Deborah A. Cobb-Clark & Mathias G. Sinning, 2009. "Neighborhood Diversity and the Appreciation of Native- and Immigrant-Owned Homes," Ruhr Economic Papers, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen 0137, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  2. David Card & Alexandre Mas & Jesse Rothstein, 2008. "Tipping and the Dynamics of Segregation," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 123(1), pages 177-218, 02.
  3. Zhiling Wang & Thomas de Graaff & Peter Nijkamp, 2014. "Cultural Diversity and Cultural Distance as Choice Determinants of Migration Destination," Tinbergen Institute Discussion Papers, Tinbergen Institute 14-066/VIII, Tinbergen Institute.
  4. Nathan, Max, 2013. "The Wider Economic Impacts of High-Skilled Migrants: A Survey of the Literature," IZA Discussion Papers 7653, Institute for the Study of Labor (IZA).
  5. Leah Boustan & Allison Shertzer, 2013. "Population Trends as a Counterweight to Central City Decline, 1950–2000," Demography, Springer, Springer, vol. 50(1), pages 125-147, February.
  6. Accetturo, Antonio & Manaresi, Francesco & Mocetti, Sauro & Olivieri, Elisabetta, 2014. "Don't stand so close to me: The urban impact of immigration," Regional Science and Urban Economics, Elsevier, Elsevier, vol. 45(C), pages 45-56.
  7. Steven Stillman & David C. Maré, 2008. "Housing Markets and Migration: Evidence from New Zealand," Working Papers, Motu Economic and Public Policy Research 08_06, Motu Economic and Public Policy Research.
  8. Gautier, Pieter A. & Siegmann, Arjen & Van Vuuren, Aico, 2009. "Terrorism and attitudes towards minorities: The effect of the Theo van Gogh murder on house prices in Amsterdam," Journal of Urban Economics, Elsevier, vol. 65(2), pages 113-126, March.
  9. Casas-Arce, Pablo & Saiz, Albert, 2011. "Women and Power: Unwilling, Ineffective, or Held Back?," IZA Discussion Papers 5645, Institute for the Study of Labor (IZA).
  10. Bosch, Mariano & Carnero, M. Angeles & Farré, Lídia, 2011. "Rental Housing Discrimination and the Persistence of Ethnic Enclaves," IZA Discussion Papers 5583, Institute for the Study of Labor (IZA).
  11. Verena Dill & Uwe Jirjahn, 2011. "Ethnic Residential Segregation and Immigrants' Perceptions of Discrimination in West Germany," SOEPpapers on Multidisciplinary Panel Data Research, DIW Berlin, The German Socio-Economic Panel (SOEP) 416, DIW Berlin, The German Socio-Economic Panel (SOEP).
  12. 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, Elsevier, vol. 45(C), pages 22-32.
  13. Carlsson, Magnus & Eriksson, Stefan, 2014. "Discrimination in the rental market for apartments," Journal of Housing Economics, Elsevier, Elsevier, vol. 23(C), pages 41-54.
  14. Francesco Andreoli & Alessandra Michelangeli, 2014. "Welfare Measures to Assess Urban Quality of Life," Working Papers, University of Milano-Bicocca, Department of Economics 278, University of Milano-Bicocca, Department of Economics, revised Jun 2014.

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