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The Effect of the Theo van Gogh Murder on House Prices in Amsterdam

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  • Gautier, Pieter
  • van Vuuren, Aico
  • Siegmann, Arjen

Abstract

Does Islamic terrorism have an effect on the general attitudes towards Muslim minorities? We use the murder of Theo van Gogh as an event study to address this question. Specifically, we use the hedonic-market model and test for an effect on listed house prices in neighbourhoods where more than 25% of the people belong to an ethnic minority from a Muslim country (type I). Relative to the other neighbourhoods, house prices in type I neighbourhoods decreased in 10 months by about 3%, with a widening gap over time. We use a unique weekly data set from a multi listing service that contains over 70% of all houses for sale and obtain the actual transaction prices from the registers office. Our results are robust to several adjustments including changes in the control group. There is no significant difference in the time it takes for houses to be sold in type I versus other neighbourhoods. Finally, we find evidence that segregation increased. People belonging to the Muslim minority were more likely to buy and less likely to sell a house in a type I neighbourhood after the murder than before.

Suggested Citation

  • Gautier, Pieter & van Vuuren, Aico & Siegmann, Arjen, 2007. "The Effect of the Theo van Gogh Murder on House Prices in Amsterdam," CEPR Discussion Papers 6175, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:6175
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    Cited by:

    1. Abadie, Alberto & Dermisi, Sofia, 2008. "Is terrorism eroding agglomeration economies in Central Business Districts? Lessons from the office real estate market in downtown Chicago," Journal of Urban Economics, Elsevier, vol. 64(2), pages 451-463, September.
    2. Marco Hoeberichts & Maarten van Rooij & Arjen Siegmann, 2008. "Market Thinness, List Price Revisions and Time to Sell: Evidence from a large-scale housing dataset," DNB Working Papers 176, Netherlands Central Bank, Research Department.
    3. Gautier, Pieter A. & Siegmann, Arjen & Van Vuuren, Aico, 2009. "Terrorism and attitudes towards minorities: The effect of the Theo van Gogh murder on house prices in Amsterdam," Journal of Urban Economics, Elsevier, vol. 65(2), pages 113-126, March.

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    More about this item

    Keywords

    Economics of terror; Housing market; Hedonic market method; Differences in differences;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • 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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