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Estimating Ethnic Preferences Using Ethnic Housing Quotas in Singapore

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  • Maisy Wong

Abstract

This article estimates people's taste for living with own-ethnic-group neighbours using variation from a natural experiment in Singapore: ethnic housing quotas. I develop a location choice model that informs the use of policy variation from the quotas to address endogeneity issues well known in the social interactions literature. I assembled a dataset on neighbourhood-level ethnic proportions by matching more than 500,000 names in the phonebook to ethnicities. I find that all groups want to live with some own-ethnic-group neighbours but they also exhibit inverted U-shaped preferences so that once a neighbourhood has enough own ethnic neighbours, they would rather add a new neighbour from other groups. Welfare simulations show that about 30% of the neighbourhoods are within one standard deviation of the first-best allocation of ethnic groups. Copyright 2013, Oxford University Press.

Suggested Citation

  • Maisy Wong, 2013. "Estimating Ethnic Preferences Using Ethnic Housing Quotas in Singapore," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 80(3), pages 1178-1214.
    • Handle: RePEc:oup:restud:v:80:y:2013:i:3:p:1178-1214
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    File URL: http://hdl.handle.net/10.1093/restud/rdt002
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