Residential Segregation in General Equilibrium

Patrick Bayer, Robert McMillan and Kim Rueben ()

Working Papers from Economic Growth Center, Yale University

Abstract: This paper studies the causes and consequences of racial segregation using a new general equilibrium model that treats neighborhood compositions as endogenous. The model is estimated using unusually detailed restricted Census microdata covering the entire San Francisco Bay Area, and in combination with a rich array of econometric estimates, serves as a powerful tool for carrying out counterfactual simulations that shed light on the causes and consequences of segregation. In terms of causes, and contrasting with prior research, our GE simulations indicate that equalizing income and education across race would be unlikely to result in significant reductions in racial segregation, as minority households would sort into newly formed minority neighborhoods. Indeed, among Asian and Hispanic households, segregation increases. In terms of consequences, this paper provides the first evidence that sorting on the basis of race gives rise to significant reductions in the consumption of local public goods by minority households and upper-income minority households in particular. These consumption effects are likely to have important intergenerational implications.

Keywords: Segregation; General Equilibrium; Endogenous Sorting; Urban Housing Market; Locational Equilibrium; Counterfactual Simulation; Discrete Choice (search for similar items in EconPapers)
JEL-codes: H0 J7 R0 R2 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dcm, nep-edu, nep-geo, nep-pbe and nep-ure
Date: 2004-05
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (22) Track citations by RSS feed

Downloads: (external link)
http://www.econ.yale.edu/growth_pdf/cdp885.pdf (application/pdf)

Related works:
Working Paper: Residential Segregation in General Equilibrium (2005)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:egc:wpaper:885

Access Statistics for this paper

More papers in Working Papers from Economic Growth Center, Yale University
Contact information at EDIRC.
Series data maintained by Louise Danishevsky ().