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Ethnic Segregation and Ghettos


  • Alex Anas

    (State University of New York at Buffalo)


Throughout history cities have contained separate areas where ethnic groups are concentrated. In the U.S. many older cities in the Northeast and Midwest contain large African-American ghettos. We discuss the causes and consequences of ethnic and racial segregation. We identify differences between voluntary and involuntary ghettos and we understand them using agglomeration economies, positive and negative externalities, bid rent theory, land and labor markets. We show that sharply segregated urban land use patterns can be socially efficient or inefficient depending on the nature of preferences and the externalities. Exclusionary policies often capture the economic efficiency. We observe a bewildering variety of political and public policy responses to segregation in Brazil, Cyprus, Europe, India, Israel, South Africa and the United States.

Suggested Citation

  • Alex Anas, 2004. "Ethnic Segregation and Ghettos," Urban/Regional 0408006, University Library of Munich, Germany.
  • Handle: RePEc:wpa:wuwpur:0408006
    Note: Type of Document - pdf; pages: 24. Prepared as a chapter for:A Companion to Urban Economics, an undergraduate reader, Blackwell publishers. Richard Arnott and Daniel McMillen, editors.

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    References listed on IDEAS

    1. Anas, Alex, 2002. "Prejudice, exclusion, and compensating transfers: the economics of ethnic segregation," Journal of Urban Economics, Elsevier, vol. 52(3), pages 409-432, November.
    2. Schelling, Thomas C, 1969. "Models of Segregation," American Economic Review, American Economic Association, vol. 59(2), pages 488-493, May.
    3. Kain, John F & Quigley, John Michael, 1972. "Housing Market Discrimination, Homeownership, and Savings Behavior," American Economic Review, American Economic Association, vol. 62(3), pages 263-277, June.
    4. Galster, George C, 1977. "A Bid-Rent Analysis of Housing Market Discrimination," American Economic Review, American Economic Association, vol. 67(2), pages 144-155, March.
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    JEL classification:

    • R - Urban, Rural, Regional, Real Estate, and Transportation Economics

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