This paper identifies the impact of cultural diversity on local economies, by explaining spatial disparities in wages and housing prices across Dutch cities using unique individual panel data of homeowners during the period 1999 and 2008. We distinguish between the effects of spatial sorting based on individual heterogeneity, interactions‐based productivity effects, and consumer amenities while controlling for interactions between the labor and housing market. In line with previous literature, we find a positive effect of cultural diversity on average housing prices. After controlling for spatial sorting, the effect of cultural diversity on housing prices is negative. The negative impact of cultural diversity on local housing markets is likely driven by a causal effect between the presence of immigrants and neighborhood quality that outweighs a positive effect of immigrant‐induced diversity in consumption goods.

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This article focuses on the use of big data for urban geography research. We collect data from the location-based service Foursquare in The Netherlands and employ it to obtain a rich catalogue of restaurant locations and other urban amenities, as well as a measure of their popularity among users. Because the Foursquare data can be combined with traditional sources of socio-economic data obtained from Statistics Netherlands, we can quantify, document and characterise some of the biases inherent in these new sources of data in the context of urban applications. A detailed analysis is given as to when this type of big data is useful and when it is misleading. Although the users of Foursquare are not representative of the whole population, we argue that this inherent bias can be exploited for research about the attractiveness of urban landscapes and consumer amenities in addition to the more traditional data on urban amenities.

Most research on ethnic relocation at the neighborhood level focuses on either in-migration or out-migration, considering characteristics of either the origin or the destination neighborhood. Gravity models consider characteristics of both the origin and destination of movers, but are mostly used to explain international or interregional migrant flows. We estimate a gravity model at the neighborhood level to identify the role of ethnic heterogeneity across space in two Dutch cities, explaining both size and ethnic composition of mover flows within cities. Our findings suggest a preference for living with the own ethnic group in an otherwise diverse neighborhood.