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Segregation and Racial Preferences: New Theoretical and Empirical Approaches

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  • Stephen L. Ross

    (University of Connecticut)

Abstract

This paper investigates the role of preferences for social interactions or outcomes in determining observed patterns of racial segregation. In the theoretical section, consumers maximize utility by allocating time between personal time and social interactions within their neighborhood, and the dual of this problem is used to investigate the bidding and sorting of households over racial composition. The models suggests that African-American households may outbid white households to reside in white neighborhoods, and unlike previous models of segregation this model is consistent with either racial segregation or integration. In the empirical analysis, proxy variables are developed for unobservable attributes that enter household preferences based on measures of household outcomes and satisfaction, and then specifies an econometric model of residential location choice using those attributes. The paper finds evidence that racial differences in preferences for education can explain a substantial portion, but not all, of the racial segregation observed in 1985 Philadelphia using data from the American Housing Survey.

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Bibliographic Info

Paper provided by University of Connecticut, Department of Economics in its series Working papers with number 2002-04.

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Length: 44 pages
Date of creation: Apr 2002
Date of revision: Apr 2003
Publication status: Forthcoming in Annales d'Economie et de Statistique (2003)
Handle: RePEc:uct:uconnp:2002-04

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Web page: http://www.econ.uconn.edu/
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References

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  1. Yongheng Deng & Stephen L. Ross & Susan M. Wachter, 2002. "Racial Differences in Homeownership: The Effect of Residential Location," Working papers 2002-05, University of Connecticut, Department of Economics.
  2. Kern, Clifford R., 1981. "Racial prejudice and residential segregation: The Yinger model revisited," Journal of Urban Economics, Elsevier, vol. 10(2), pages 164-172, September.
  3. Yinger, John, 1976. "Racial prejudice and racial residential segregation in an urban model," Journal of Urban Economics, Elsevier, vol. 3(4), pages 383-396, October.
  4. George J. Borjas, 1997. "To Ghetto or Not to Ghetto: Ethnicity and Residential Segregation," NBER Working Papers 6176, National Bureau of Economic Research, Inc.
  5. Shelly Lundberg & Richard Startz, 1998. "Race, Information, and Segregation," Working Papers 0047, University of Washington, Department of Economics.
  6. Cutler, David M & Glaeser, Edward L, 1997. "Are Ghettos Good or Bad?," The Quarterly Journal of Economics, MIT Press, vol. 112(3), pages 827-72, August.
  7. Gabriel, Stuart A & Rosenthal, Stuart S, 1989. "Household Location and Race: Estimates of Multinomial Logit Model," The Review of Economics and Statistics, MIT Press, vol. 71(2), pages 240-49, May.
  8. Zenou, Yves & Boccard, Nicolas, 2000. "Racial Discrimination and Redlining in Cities," Journal of Urban Economics, Elsevier, vol. 48(2), pages 260-285, September.
  9. John Yinger, 1978. "The Black-White Price Differential in Housing: Some Further Evidence," Land Economics, University of Wisconsin Press, vol. 54(2), pages 187-206.
  10. Courant, Paul N., 1978. "Racial prejudice in a search model of the urban housing market," Journal of Urban Economics, Elsevier, vol. 5(3), pages 329-345, July.
  11. Ihlanfeldt, Keith R. & Scafidi, Benjamin, 2002. "Black Self-Segregation as a Cause of Housing Segregation: Evidence from the Multi-City Study of Urban Inequality," Journal of Urban Economics, Elsevier, vol. 51(2), pages 366-390, March.
  12. Lang, Kevin, 1986. "A Language Theory of Discrimination," The Quarterly Journal of Economics, MIT Press, vol. 101(2), pages 363-82, May.
  13. Benabou, Roland, 1993. "Workings of a City: Location, Education, and Production," The Quarterly Journal of Economics, MIT Press, vol. 108(3), pages 619-52, August.
  14. de Bartolome, Charles A M, 1990. "Equilibrium and Inefficiency in a Community Model with Peer Group Effects," Journal of Political Economy, University of Chicago Press, vol. 98(1), pages 110-33, February.
  15. David M. Cutler & Edward L. Glaeser & Jacob L. Vigdor, 1999. "The Rise and Decline of the American Ghetto," Journal of Political Economy, University of Chicago Press, vol. 107(3), pages 455-506, June.
  16. Schafer, Robert, 1979. "Racial discrimination in the Boston housing market," Journal of Urban Economics, Elsevier, vol. 6(2), pages 176-196, April.
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Cited by:
  1. Weinberg, Bruce A., 2013. "Group design with endogenous associations," Regional Science and Urban Economics, Elsevier, vol. 43(2), pages 411-421.
  2. Bruce A. Weinberg, 2007. "Social Interactions with Endogenous Associations," NBER Working Papers 13038, National Bureau of Economic Research, Inc.

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