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Segregation and Racial Preferences: New Theoretical and Empirical Approaches

  • Stephen L. Ross

    (University of Connecticut)

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.

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File URL: http://web2.uconn.edu/economics/working/2002-04r.pdf
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File URL: http://web2.uconn.edu/economics/working/2002-04.pdf
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Paper provided by University of Connecticut, Department of Economics in its series Working papers with number 2002-04.

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Length: 44 pages
Date of creation: Apr 2002
Date of revision: Apr 2003
Publication status: Forthcoming in Annales d'Economie et de Statistique (2003)
Handle: RePEc:uct:uconnp:2002-04
Contact details of provider: Postal: University of Connecticut 365 Fairfield Way, Unit 1063 Storrs, CT 06269-1063
Phone: (860) 486-4889
Fax: (860) 486-4463
Web page: http://www.econ.uconn.edu/

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  1. Cutler, David & Vigdor, Jacob & Glaeser, Edward, 1999. "The Rise and Decline of the American Ghetto," Scholarly Articles 2770033, Harvard University Department of Economics.
  2. Gabriel, Stuart A & Rosenthal, Stuart S, 1989. "Household Location and Race: Estimates of Multinomial Logit Model," The Review of Economics and Statistics, MIT Press, vol. 71(2), pages 240-49, May.
  3. Courant, Paul N., 1978. "Racial prejudice in a search model of the urban housing market," Journal of Urban Economics, Elsevier, vol. 5(3), pages 329-345, July.
  4. Yinger, John, 1976. "Racial prejudice and racial residential segregation in an urban model," Journal of Urban Economics, Elsevier, vol. 3(4), pages 383-396, October.
  5. Borjas, George J., 1998. "To Ghetto or Not to Ghetto: Ethnicity and Residential Segregation," Journal of Urban Economics, Elsevier, vol. 44(2), pages 228-253, September.
  6. Shelly Lundberg & Richard Startz, 1998. "Race, Information, and Segregation," Discussion Papers in Economics at the University of Washington 0047, Department of Economics at the University of Washington.
  7. David M. Cutler & Edward L. Glaeser, 1995. "Are Ghettos Good or Bad?," NBER Working Papers 5163, National Bureau of Economic Research, Inc.
  8. Lang, Kevin, 1986. "A Language Theory of Discrimination," The Quarterly Journal of Economics, MIT Press, vol. 101(2), pages 363-82, May.
  9. Ihlanfeldt, Keith R. & Scafidi, Benjamin, 2002. "Black Self-Segregation as a Cause of Housing Segregation: Evidence from the Multi-City Study of Urban Inequality," Journal of Urban Economics, Elsevier, vol. 51(2), pages 366-390, March.
  10. John Yinger, 1978. "The Black-White Price Differential in Housing: Some Further Evidence," Land Economics, University of Wisconsin Press, vol. 54(2), pages 187-206.
  11. BOCCARD, Nicolas & ZENOU, Yves, 1999. "Racial discrimination and redlining in cities," CORE Discussion Papers 1999013, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  12. Schafer, Robert, 1979. "Racial discrimination in the Boston housing market," Journal of Urban Economics, Elsevier, vol. 6(2), pages 176-196, April.
  13. Benabou, Roland, 1993. "Workings of a City: Location, Education, and Production," The Quarterly Journal of Economics, MIT Press, vol. 108(3), pages 619-52, August.
  14. de Bartolome, Charles A M, 1990. "Equilibrium and Inefficiency in a Community Model with Peer Group Effects," Journal of Political Economy, University of Chicago Press, vol. 98(1), pages 110-33, February.
  15. Yongheng Deng & Stephen L. Ross & Susan M. Wachter, 2002. "Racial Differences in Homeownership: The Effect of Residential Location," Working papers 2002-05, University of Connecticut, Department of Economics.
  16. Kern, Clifford R., 1981. "Racial prejudice and residential segregation: The Yinger model revisited," Journal of Urban Economics, Elsevier, vol. 10(2), pages 164-172, September.
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