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

Author

Listed:
  • Antonio Accetturo

    () (Bank of Italy)

  • Francesco Manaresi

    () (Bank of Italy)

  • Sauro Mocetti

    () (Bank of Italy)

  • Elisabetta Olivieri

    () (Bank of Italy)

Abstract

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.

Suggested Citation

  • Antonio Accetturo & Francesco Manaresi & Sauro Mocetti & Elisabetta Olivieri, 2012. "Don't stand so close to me: the urban impact of immigration," Temi di discussione (Economic working papers) 866, Bank of Italy, Economic Research and International Relations Area.
  • Handle: RePEc:bdi:wptemi:td_866_12
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    References listed on IDEAS

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    Cited by:

    1. Hubert Jayet & Glenn Rayp & Ilse Ruyssen & Nadiya Ukrayinchuk, 2016. "Immigrants’ location choice in Belgium," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 57(1), pages 63-89, July.
    2. Basten, Christoph & Koch, Catherine, 2015. "The causal effect of house prices on mortgage demand and mortgage supply: Evidence from Switzerland," Journal of Housing Economics, Elsevier, vol. 30(C), pages 1-22.
    3. Sanchis-Guarner, Rosa, 2017. "Decomposing the impact of immigration on house prices," LSE Research Online Documents on Economics 86571, London School of Economics and Political Science, LSE Library.
    4. Adams, Zeno & Blickle, Kristian, 2016. "Immigration, Real Estate Prices and the Consumption Decisions of Native Households," Working Papers on Finance 1615, University of St. Gallen, School of Finance.
    5. Mussa, Abeba & Nwaogu, Uwaoma G. & Pozo, Susan, 2017. "Immigration and housing: A spatial econometric analysis," Journal of Housing Economics, Elsevier, vol. 35(C), pages 13-25.
    6. repec:spr:sjecst:v:153:y:2017:i:1:d:10.1007_bf03399433 is not listed on IDEAS
    7. Marcus H. Böhme & Sarah Kups, 2017. "The economic effects of labour immigration in developing countries: A literature review," OECD Development Centre Working Papers 335, OECD Publishing.
    8. Kathrin Degen & Andreas M. Fischer, 2017. "Immigration and Swiss House Prices," Swiss Journal of Economics and Statistics, Springer;Swiss Society of Economics and Statistics, vol. 153(1), pages 15-36, January.
    9. Bayar, Mehmet, 2016. "The impact of cultural diversity on the German housing market," Ruhr Economic Papers 662, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    10. Larkin, Matthew P. & Askarov, Zohid & Doucouliagos, Chris & Dubelaar, Chris & Klona, Maria & Newton, Joshua & Stanley, T. D. & Vocino, Andrea, 2018. "Do House Prices Sink or Ride the Wave of Immigration?," IZA Discussion Papers 11497, Institute for the Study of Labor (IZA).
    11. Jessie Bakens & Raymond Florax & Henri (H.L.F.) de Groot & Peter Mulder, 2018. "Living Apart Together: The Economic Value of Ethnic Diversity in Cities," Tinbergen Institute Discussion Papers 18-029/VIII, Tinbergen Institute.
    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, vol. 45(C), pages 22-32.
    13. Fernández-Huertas Moraga, Jesús & Ferrer-i-Carbonell, Ada & Saiz, Albert, 2017. "Immigrant Locations and Native Residential Preferences: Emerging Ghettos or New Communities?," IZA Discussion Papers 11143, Institute for the Study of Labor (IZA).
    14. repec:gam:jsusta:v:10:y:2018:i:2:p:343-:d:129201 is not listed on IDEAS
    15. Christoph Basten & Cathérine Koch, 2014. "The causal effect of house prices on mortgage demand and mortgage supply," ECON - Working Papers 140, Department of Economics - University of Zurich.
    16. repec:eee:regeco:v:65:y:2017:i:c:p:56-64 is not listed on IDEAS
    17. Riccardo Borgoni & Giacomo Degli Antoni & Marco Faillo & Alessandra Michelangeli, 2017. "Preferences for living in homogenous communities and cooperation: a new methodological approach combining the hedonic price model and a field experiment," Econometica Working Papers wp62, Econometica.

    More about this item

    Keywords

    migration; housing; spatial segregation;

    JEL classification:

    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration

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