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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
Date of revision:
Handle: RePEc:bdi:wptemi:td_866_12
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  1. Anna Maria Mayda, 2006. "Who Is Against Immigration? A Cross-Country Investigation of Individual Attitudes toward Immigrants," The Review of Economics and Statistics, MIT Press, vol. 88(3), pages 510-530, August.
  2. Sauro Mocetti & Carmine Porello, 2010. "How does immigration affect native internal mobility? New evidence from Italy," Temi di discussione (Economic working papers) 748, Bank of Italy, Economic Research and International Relations Area.
  3. David Card, 1996. "Immigrant Inflows, Native Outflows, and the Local Labor Market Impacts of Higher Immigration," Working Papers 747, Princeton University, Department of Economics, Industrial Relations Section..
  4. Ather H. Akbari & Yigit Aydede, 2012. "Effects of immigration on house prices in Canada," Applied Economics, Taylor & Francis Journals, vol. 44(13), pages 1645-1658, May.
  5. Liesbet Okkerse, 2008. "How To Measure Labour Market Effects Of Immigration: A Review," Journal of Economic Surveys, Wiley Blackwell, vol. 22(1), pages 1-30, 02.
  6. Jessie Bakens & Peter Mulder & Peter Nijkamp, 2012. "Economic Impacts of Cultural Diversity in the Netherlands: Productivity, Utility, and Sorting," Tinbergen Institute Discussion Papers 12-024/3, Tinbergen Institute.
  7. Milo Bianchi & Paolo Buonanno & Paolo Pinotti, 2012. "Do Immigrants Cause Crime?," Working Papers halshs-00670036, HAL.
  8. Albert Saiz & Susan Wachter, 2011. "Immigration and the Neighborhood," American Economic Journal: Economic Policy, American Economic Association, vol. 3(2), pages 169-88, May.
  9. Deborah A. Cobb-Clark & Mathias G. Sinning, 2009. "Neighborhood Diversity and the Appreciation of Native- and Immigrant-Owned Homes," CEPR Discussion Papers 624, Centre for Economic Policy Research, Research School of Economics, Australian National University.
  10. Gianmarco I.P. Ottaviano & Giovanni Peri, 2004. "The Economic Value of Cultural Diversity: Evidence from US Cities," NBER Working Papers 10904, National Bureau of Economic Research, Inc.
  11. Libertad Gonzalez & Francesc Ortega, 2009. "Immigration and Housing Booms: Evidence from Spain," CReAM Discussion Paper Series 0919, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  12. Battu, Harminder & Zenou, Yves, 2009. "Oppositional Identities and Employment for Ethnic Minorities: Evidence from England," IZA Discussion Papers 4517, Institute for the Study of Labor (IZA).
  13. George J. Borjas, 2005. "Native Internal Migration and the Labor Market Impact of Immigration," NBER Working Papers 11610, National Bureau of Economic Research, Inc.
  14. Albert Saiz, 2003. "Immigration and housing rents in American cities," Working Papers 03-12, Federal Reserve Bank of Philadelphia.
  15. Cutler, David & Vigdor, Jacob & Glaeser, Edward, 1999. "The Rise and Decline of the American Ghetto," Scholarly Articles 2770033, Harvard University Department of Economics.
  16. Bayer, Patrick & McMillan, Robert & Rueben, Kim S., 2004. "What drives racial segregation? New evidence using Census microdata," Journal of Urban Economics, Elsevier, vol. 56(3), pages 514-535, November.
  17. Degen, Kathrin & Fischer, Andreas M, 2009. "Immigration and Swiss House Prices," CEPR Discussion Papers 7583, C.E.P.R. Discussion Papers.
  18. Enrico Moretti, 2010. "Local Labor Markets," NBER Working Papers 15947, National Bureau of Economic Research, Inc.
  19. Andreas M. Fischer, 2011. "Immigrant language barriers and house prices," Globalization and Monetary Policy Institute Working Paper 97, Federal Reserve Bank of Dallas.
  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. 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.
  22. Steven Stillman & David C. Maré, 2008. "Housing Markets and Migration: Evidence from New Zealand," Working Papers 08_06, Motu Economic and Public Policy Research.
  23. Albert Saiz, 2003. "Room in the Kitchen for the Melting Pot: Immigration and Rental Prices," The Review of Economics and Statistics, MIT Press, vol. 85(3), pages 502-521, August.
  24. David Card & Alexandre Mas & Jesse Rothstein, 2008. "Tipping and the Dynamics of Segregation," The Quarterly Journal of Economics, Oxford University Press, vol. 123(1), pages 177-218.
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