Estimating Neighborhood Choice Models: Lessons from a Housing Assistance Experiment

Galiani, Sebastián; Murphy, Alvin; Pantano, Juan

doi:10.2139/ssrn.2015474

Cited by 28 publications

(41 citation statements)

References 45 publications

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“…Therefore, such policy changes cannot be evaluated without taking into account general equilibrium effects. Tackling this issues using structural sorting models in the same way as Galiani et al (2015) and Geyer (2017) in the case of the U.S. housing voucher program seems like a fruitful avenue for future research.…”

Section: Discussionmentioning

confidence: 99%

“…Carlson et al (2012) review the earlier evidence on the effects of tenant-based programs on households' relocation decisions. Galiani et al (2015) and Geyer (2017) use structural sorting models to simulate how the parameters of housing voucher programs affect households' neighborhood and housing consumption choices. Using U.S. data, both papers find that the details of the voucher program affect voucher recipients' choice regarding the trade-off between housing consumption and neighborhood quality.…”

Section: Related Literaturementioning

confidence: 99%

See 1 more Smart Citation

Delivering affordable housing and neighborhood quality: A comparison of place- and tenant-based programs

Eerola

Saarimaa

2018

Journal of Housing Economics

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. This paper analyzes the relative merits of large place-and tenant-based housing programs in Finland in terms of housing affordability and neighborhood quality. Using hedonic regression methods and household micro data, we find that rent savings to public housing tenants are less targeted towards low-income households than housing allowance. In addition, low-income public housing tenants live in poorer, less educated and lower quality neighborhoods than similar low-income households in private rental housing. This suggests that place-based programs may lead to more segregation than tenant-based alternatives even when neighborhood mixing is an explicit aim of the program, as in Finland. Terms of use: Documents inJEL-Codes: H220, R210, R230.

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Section: Discussionmentioning

confidence: 99%

Section: Related Literaturementioning

confidence: 99%

Delivering affordable housing and neighborhood quality: A comparison of place- and tenant-based programs

Eerola

Saarimaa

2018

Journal of Housing Economics

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“…Recent work has also begun to tackle the difficult, but extremely important, task of assessing external validity. A recent study, by Sebastian Galiani, Alvin Murphy, and Juan Pantano (2012), uses a sorting model to make out-of-sample predictions about participation in a housing assistance program targeting low-income households. Remarkably, their predictions align very closely with actual participation observed in a randomized controlled trial of the "Moving to Opportunity" experiments conducted by the U.S. Department of Housing and Urban Development.…”

Section: Introductionmentioning

confidence: 99%

“…One possibility is to use the models to predict observable outcomes that are not used as fitting criteria during the estimation. Galiani, Murphy, and Pantano (2012) provide the first application of this approach.…”

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confidence: 99%

The New Economics of Equilibrium Sorting and Policy Evaluation Using Housing Markets

Kuminoff

Smith

Timmins

2013

Journal of Economic Literature

209

102

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Households "sort" across neighborhoods according to their wealth and their preferences for public goods, social characteristics, and commuting opportunities. The aggregation of these individual choices in markets and in other institutions influences the supply of amenities and local public goods. Pollution, congestion, and the quality of public education are examples. Over the past decade, advances in economic models of this sorting process have led to a new framework that promises to alter the ways we conceptualize the policy evaluation process in the future. These "equilibrium sorting" models use the properties of market equilibria, together with information on household behavior, to infer structural parameters that characterize preference heterogeneity. The results can be used to develop theoretically consistent predictions for the welfare implications of future policy changes. Analysis is not confined to marginal effects or a partial equilibrium setting. Nor is it limited to prices and quantities. Sorting models can integrate descriptions of how non-market goods are generated, estimate how they affect decision making and, in turn, predict how they will be affected by future policies targeting prices or quantities. Conversely, sorting models can predict how equilibrium prices and quantities will be affected by policies that target product quality, information, or amenities generated by the sorting process. These capabilities are just beginning to be understood and used in applied research. This survey article aims to synthesize the state of knowledge on equilibrium sorting, the new possibilities for policy analysis, and the conceptual and empirical challenges that define the frontiers of the literature.

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“…While there are well-developed theoretical and empirical literatures related to Wilson (1987), researchers have typically been forced to abstract entirely from important features of Wilson's hypothesis in order to take their models to data. 5 In the literature studying the Moving to Opportunity (MTO) housing mobility experiment, for example, analyses are either entirely focused on sorting (Galiani et al (2012)), or else must adopt stylized, static models of sorting in order to identify neighborhood effects on outcomes (Kling et al (2007), Aliprantis and Richter (2014), Aliprantis (2014a), Pinto (2014)). 6 Badel (2010) is the most similar paper in the literature to ours, which to our knowledge is the first to use a Bewley-Aiyagari model to study neighborhood externalities.…”

Section: Introductionmentioning

confidence: 99%

Neighborhood Dynamics and the Distribution of Opportunity

Aliprantis

Carroll

2015

Working Paper (Federal Reserve Bank of Cleveland)

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Wilson (1987) argued that policies ending racial discrimination would not equalize opportunity without addressing residential sorting and neighborhood externalities. This paper studies related counterfactual policies using an overlapping-generations dynamic general equilibrium model of residential sorting and intergenerational human capital accumulation. In the model, households choose where to live and how much to invest toward the production of their child's human capital. The return on parents' investment is determined in part by the child's ability and in part by an externality determined by the human capital in their neighborhood. We calibrate the model with two neighborhoods and neighborhood-specifi c production technologies to data from Chicago when mobility was restricted by race. We then conduct three numerical experiments by eliminating the restriction on neighborhood choice, equalizing production technologies, or both. We fi nd that allowing residential mobility generates persistent income inequality, even when technologies are equalized across neighborhoods. Equalizing technologies only equalizes opportunity for residents in the originally segregated neighborhood when high-income households reside there. Our fi ndings suggest that policies aimed at improving outcomes in impoverished areas should feature incentives for high-income households to stay or migrate into the neighborhood.JEL codes: D31, D58, E24, J24, R23.

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Estimating Neighborhood Choice Models: Lessons from a Housing Assistance Experiment

Cited by 28 publications

References 45 publications

Delivering affordable housing and neighborhood quality: A comparison of place- and tenant-based programs

Delivering affordable housing and neighborhood quality: A comparison of place- and tenant-based programs

The New Economics of Equilibrium Sorting and Policy Evaluation Using Housing Markets

Neighborhood Dynamics and the Distribution of Opportunity

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