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Segregation and Racial Preferences: New Theoretical and Empirical Approaches

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  • Stephen L. Ross

    (University of Connecticut)

Abstract

This paper investigates the role of preferences for social interactions or outcomes in determining observed patterns of racial segregation. In the theoretical section, consumers maximize utility by allocating time between personal time and social interactions within their neighborhood, and the dual of this problem is used to investigate the bidding and sorting of households over racial composition. The models suggests that African-American households may outbid white households to reside in white neighborhoods, and unlike previous models of segregation this model is consistent with either racial segregation or integration. In the empirical analysis, proxy variables are developed for unobservable attributes that enter household preferences based on measures of household outcomes and satisfaction, and then specifies an econometric model of residential location choice using those attributes. The paper finds evidence that racial differences in preferences for education can explain a substantial portion, but not all, of the racial segregation observed in 1985 Philadelphia using data from the American Housing Survey.

Suggested Citation

  • Stephen L. Ross, 2002. "Segregation and Racial Preferences: New Theoretical and Empirical Approaches," Working papers 2002-04, University of Connecticut, Department of Economics, revised Apr 2003.
  • Handle: RePEc:uct:uconnp:2002-04
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    4. Deng, Yongheng & Ross, Stephen L. & Wachter, Susan M., 2003. "Racial differences in homeownership: the effect of residential location," Regional Science and Urban Economics, Elsevier, vol. 33(5), pages 517-556, September.
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    Cited by:

    1. Weinberg, Bruce A., 2013. "Group design with endogenous associations," Regional Science and Urban Economics, Elsevier, vol. 43(2), pages 411-421.
    2. Bruce A. Weinberg, 2007. "Social Interactions with Endogenous Associations," NBER Working Papers 13038, National Bureau of Economic Research, Inc.

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    More about this item

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • J7 - Labor and Demographic Economics - - Labor Discrimination
    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis

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