Minorities and property values: Evidence from residential buildings in Israel

Yael Elster; Noam Zussman

doi:10.1016/j.jue.2022.103525

Minorities and property values: Evidence from residential buildings in Israel

Yael Elster, Noam Zussman

Department of Economics

Research output: Contribution to journal › Article › peer-review

Abstract

This study estimates, for the first time, individuals valuation of living in a building with a member of a minority, by exploiting unique restricted data on about a third of Israel's neighborhoods. We rely on the hedonic approach and use a difference-in-differences identification strategy, comparing nearby buildings that experienced either early or late entry of minorities. We find that house prices declined by 2–3% after the first move-in of Israelis of Ethiopian origin or ultra-Orthodox Jews. Our analysis shows that New-immigrants only significantly affect prices during a massive migration wave (-10%) and indicate that Israeli Arabs do not affect prices. Results are not driven by (a) the socio-demographic profile of the minorities who enter, (b) the difference between their profile and the existing residents profile, (c) buyers and sellers profiles after the first minority entrance or (d) neighborhood characteristics. The findings support the hypothesis of segregation due to discrimination.

Original language	English
Article number	103525
Journal	Journal of Urban Economics
DOIs	https://doi.org/10.1016/j.jue.2022.103525
State	Accepted/In press - 2022

Bibliographical note

Funding Information:
We thank the editor, David Neumark, three anonymous reviewers and audiences at the Hebrew University, Bank of Israel, 11th European Meeting of the Urban Economics Association, and 2022 AREUEA National Conference for valuable comments. We are grateful to Doron Sayag and Hadas Yaffe from the Israeli Central Bureau of Statistics and Adi Finkelstein from the Bank of Israel for their help with the data and to financial support from Fulbright program and the Alrov Institute for Real Estate Research.

Funding Information:
☆ We thank the editor, David Neumark, three anonymous reviewers and audiences at the Hebrew University, Bank of Israel, 11th European Meeting of the Urban Economics Association, and 2022 AREUEA National Conference for valuable comments. We are grateful to Doron Sayag and Hadas Yaffe from the Israeli Central Bureau of Statistics and Adi Finkelstein from the Bank of Israel for their help with the data and to financial support from Fulbright program and the Alrov Institute for Real Estate Research.

Publisher Copyright:
© 2022 Elsevier Inc.

Keywords

Housing market
Israel
Minorities
Residential segregation

ASJC Scopus subject areas

Economics and Econometrics
Urban Studies

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1016/j.jue.2022.103525

Cite this

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abstract = "This study estimates, for the first time, individuals valuation of living in a building with a member of a minority, by exploiting unique restricted data on about a third of Israel's neighborhoods. We rely on the hedonic approach and use a difference-in-differences identification strategy, comparing nearby buildings that experienced either early or late entry of minorities. We find that house prices declined by 2–3% after the first move-in of Israelis of Ethiopian origin or ultra-Orthodox Jews. Our analysis shows that New-immigrants only significantly affect prices during a massive migration wave (-10%) and indicate that Israeli Arabs do not affect prices. Results are not driven by (a) the socio-demographic profile of the minorities who enter, (b) the difference between their profile and the existing residents profile, (c) buyers and sellers profiles after the first minority entrance or (d) neighborhood characteristics. The findings support the hypothesis of segregation due to discrimination.",

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note = "Funding Information: We thank the editor, David Neumark, three anonymous reviewers and audiences at the Hebrew University, Bank of Israel, 11th European Meeting of the Urban Economics Association, and 2022 AREUEA National Conference for valuable comments. We are grateful to Doron Sayag and Hadas Yaffe from the Israeli Central Bureau of Statistics and Adi Finkelstein from the Bank of Israel for their help with the data and to financial support from Fulbright program and the Alrov Institute for Real Estate Research. Funding Information: ☆ We thank the editor, David Neumark, three anonymous reviewers and audiences at the Hebrew University, Bank of Israel, 11th European Meeting of the Urban Economics Association, and 2022 AREUEA National Conference for valuable comments. We are grateful to Doron Sayag and Hadas Yaffe from the Israeli Central Bureau of Statistics and Adi Finkelstein from the Bank of Israel for their help with the data and to financial support from Fulbright program and the Alrov Institute for Real Estate Research. Publisher Copyright: {\textcopyright} 2022 Elsevier Inc.",

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Minorities and property values: Evidence from residential buildings in Israel

Abstract

Bibliographical note

Keywords

ASJC Scopus subject areas

UN SDGs

Access to Document

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