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Estimating Housing Demand with an Application to Explaining Racial Segregation in Cities

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  • Patrick Bajari
  • Matthew E. Kahn

Abstract

August 2002 We present a three-stage estimation procedure to recover willingness to pay for housing attributes. In the first stage, we estimate a non-parametric hedonic home price function. Second, we recover each consumer’s taste parameters for product characteristics using first order conditions for utility maximization. Finally, we estimate the distribution of household tastes as a function of household demographics. As an application of our methods, we compare alternative explanations for why blacks choose to live in center cities while whites suburbanize. Working Papers Index

Suggested Citation

  • Patrick Bajari & Matthew E. Kahn, 2002. "Estimating Housing Demand with an Application to Explaining Racial Segregation in Cities," Working Papers 02011, Stanford University, Department of Economics.
  • Handle: RePEc:wop:stanec:02011
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    JEL classification:

    • R0 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling

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