Estimating Neighborhood Choice Models: Lessons from a Housing Assistance Experiment

Sebastian Galiani, Alvin Murphy and Juan Pantano

American Economic Review, 2015, vol. 105, issue 11, 3385-3415

Abstract: We use data from a housing-assistance experiment to estimate a model of neighborhood choice. The experimental variation effectively randomizes the rents which households face and helps identify a key structural parameter. Access to two randomly selected treatment groups and a control group allows for out-of-sample validation of the model. We simulate the effects of changing the subsidy-use constraints implemented in the actual experiment. We find that restricting subsidies to even lower poverty neighborhoods would substantially reduce take-up and actually increase average exposure to poverty. Furthermore, adding restrictions based on neighborhood racial composition would not change average exposure to either race or poverty. (JEL I32, I38, R23, R38)

JEL-codes: I32 I38 R23 R38 (search for similar items in EconPapers)
Date: 2015
Note: DOI: 10.1257/aer.20120737
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Citations: View citations in EconPapers (61)

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