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What’s the Melting Pot Worth? Multiculturalism and House Prices

Author

Listed:
  • Rachel Cho
  • Hisham Farag
  • Christoph Görtz
  • Danny McGowan
  • Huyen Nguyen
  • Max Schröder

Abstract

Is there a multicultural neighborhood price premium? We exploit plausibly exogenous variation in British colonization patterns in Northern Ireland during the early 1600s which created neighborhoods of varying religious composition that persists until today. These religious groups are culturally distinct, but are observationally equivalent ethnically and socioeconomically. A standard deviation increase neighborhood-level multiculturalism raises house prices by 9.6%. Multiculturalism raises property prices by increasing asset liquidity and housing demand as a wider spectrum of society demand houses in these areas. The findings and mechanism contrast sharply with prior evidence showing negative relationships due to homophily, social networks, and identification challenges.

Suggested Citation

  • Rachel Cho & Hisham Farag & Christoph Görtz & Danny McGowan & Huyen Nguyen & Max Schröder, 2025. "What’s the Melting Pot Worth? Multiculturalism and House Prices," CESifo Working Paper Series 11905, CESifo.
  • Handle: RePEc:ces:ceswps:_11905
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    References listed on IDEAS

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    More about this item

    Keywords

    multiculturalism; house prices; homophily; segregation;
    All these keywords.

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • G5 - Financial Economics - - Household Finance
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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