Residential income segregation: A behavioral model of the housing market

Pangallo, Marco; Nadal, Jean-Pierre; Vignes, Annick

doi:10.1016/j.jebo.2019.01.010

Cited by 28 publications

(12 citation statements)

References 56 publications

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“…This estimate implies a degree of labor mobility that, while not infinite, is quite high, at least in the long run. 22 As far as amenities are concerned, results under imperfect mobility are qualitatively similar to those under perfect mobility. In particular, the overall dispersion of amenities has not increased and rather has slightly decreased.…”

Section: Data Inference and Stylized Factsmentioning

confidence: 66%

Housing Constraints and Spatial Misallocation

Hsieh

Moretti

2019

American Economic Journal: Macroeconomics

243

147

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We quantify the amount of spatial misallocation of labor across US cities and its aggregate costs. Misallocation arises because high productivity cities like New York and the San Francisco Bay Area have adopted stringent restrictions to new housing supply, effectively limiting the number of workers who have access to such high productivity. Using a spatial equilibrium model and data from 220 metropolitan areas we find that these constraints lowered aggregate US growth by 36 percent from 1964 to 2009. (JEL E23, J24, J31, R23, R31)

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Section: Data Inference and Stylized Factsmentioning

confidence: 66%

Housing Constraints and Spatial Misallocation

Hsieh

Moretti

2019

American Economic Journal: Macroeconomics

243

147

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“…However, current behavioural models [25] optimise the residential location choice combined with transportation networks and still assume that endogenous neighbourhood characteristics determine it. In the behavioural approach [26], location decision is optimised with respect to housing prices and personal income; the neighbourhoods are assumed heterogeneous, while the primary decision driver is aspiration level. Inequality of income is the driver of spatial segregation of inhabitants.…”

Section: Theories On Real Estate Locationmentioning

confidence: 99%

Spatial Interactions in Business and Housing Location Models

Kopczewska

Kopyt

Ćwiakowski

2021

Land

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The paper combines theoretical models of housing and business locations and shows that they have the same determinants. It evidences that classical, behavioural, new economic geography, evolutionary and co-evolutionary frameworks apply simultaneously, and one should consider them jointly when explaining urban structure. We use quantitative tools in a theory-guided factors induction approach to show the complexity of location models. The paper discusses and measures spatial phenomena as distance-decaying gradients, spatial discontinuities, densities, spillovers, spatial interactions, agglomerations, and as multimodal processes. We illustrate the theoretical discussion with an empirical case of interacting point-patterns for business, housing, and population. The analysis reveals strong links between housing valuation and business location and profitability, accompanied by the related spatial phenomena. It also shows that assumptions concerning unimodal spatial urban structure, the existence of rational maximisers, distance-decaying externalities, and a single pattern of behaviour, do not hold. Instead, the reality entails consideration of multimodality, a mixture of maximisers and satisfiers, incomplete information, appearance of spatial interactions, feed-back loops, as well as the existence of persistence of behaviour, with slow and costly adjustments of location.

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“…A second challenge arises in the incorporation of a continuous wealth variable. In the past, a common approach to both measuring and modelling economic segregation has been the division of a population into discrete classes, allowing the use of categorical measures [35][36][37]. While parameterfree methods have been developed to define classes in empirical data [37], any categorization in a computational model will inevitably introduce a presumptive and possibly artificial class structure.…”

Section: A Motivationmentioning

confidence: 99%

Effect of segregation on inequality in kinetic models of wealth exchange

Fernandes

Tempere

2020

Eur. Phys. J. B

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Empirical distributions of wealth and income can be reproduced using simplified agent-based models of economic interactions, analogous to microscopic collisions of gas particles. Building upon these models of freely interacting agents, we explore the effect of a segregated economic network in which interactions are restricted to those between agents of similar wealth. Agents on a 2D lattice undergo kinetic exchanges with their nearest neighbours, while continuously switching places to minimize local wealth differences. A spatial concentration of wealth leads to a steady state with increased global inequality and a magnified distinction between local and global measures of combatting poverty. Individual saving propensity proves ineffective in the segregated economy, while redistributive taxation transcends the spatial inhomogeneity and greatly reduces inequality. Adding fluctuations to the segregation dynamics, we observe a sharp phase transition to lower inequality at a critical temperature, accompanied by a sudden change in the distribution of the wealthy elite.

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Residential income segregation: A behavioral model of the housing market

Cited by 28 publications

References 56 publications

Housing Constraints and Spatial Misallocation

Housing Constraints and Spatial Misallocation

Spatial Interactions in Business and Housing Location Models

Effect of segregation on inequality in kinetic models of wealth exchange

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