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

  • Antonio Accetturo

    ()

    (Bank of Italy)

  • Francesco Manaresi

    ()

    (Bank of Italy)

  • Sauro Mocetti

    ()

    (Bank of Italy)

  • Elisabetta Olivieri

    ()

    (Bank of Italy)

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-�-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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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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  1. Gonzalez, Libertad & Ortega, Francesc, 2009. "Immigration and Housing Booms: Evidence from Spain," IZA Discussion Papers 4333, Institute for the Study of Labor (IZA).
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  6. Tito Boeri & Marta De Philippis & Eleonora Patacchini & Michele Pellizzari, 2011. "Immigration, Housing Discrimination and Employment," Working Papers 390, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
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  16. Cobb-Clark, Deborah A. & Sinning, Mathias, 2009. "Neighborhood Diversity and the Appreciation of Native- and Immigrant-Owned Homes," IZA Discussion Papers 4464, Institute for the Study of Labor (IZA).
  17. Anna Maria Mayda, 2004. "Who is Against Immigration? A Cross-Country Investigation of Individual Attitudes toward Immigrants," Development Working Papers 187, Centro Studi Luca d\'Agliano, University of Milano.
  18. Moretti, Enrico, 2011. "Local Labor Markets," Handbook of Labor Economics, Elsevier.
  19. Kathrin Degen & Andreas M. Fischer, 2010. "Immigration and Swiss House Prices," Working Papers 2010-16, Swiss National Bank.
  20. James H. Stock & Motohiro Yogo, 2002. "Testing for Weak Instruments in Linear IV Regression," NBER Technical Working Papers 0284, National Bureau of Economic Research, Inc.
  21. Jessie Bakens & Peter Mulder & Peter Nijkamp, 2013. "Economic Impacts Of Cultural Diversity In The Netherlands: Productivity, Utility, And Sorting," Journal of Regional Science, Wiley Blackwell, vol. 53(1), pages 8-36, 02.
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