 Decomposing the impact of immigration on house pricesRegional Science and Urban Economics, 2023, vol. 100, issue C Abstract: How does an increase in immigrant inflows affect housing demand and prices for a given housing supply? In this paper, I show that we can formally decompose total demand changes into those from the immediate increase in population due to the new arrivals (the “partial effect”) and additional changes from relocated natives (the “induced effect”). I propose and apply a method to estimate these effects separately, exploiting data for Spain between 2001 and 2012. Using an instrumental variables strategy, I find that a one percentage point increase in the immigration rate raises average house sale prices by 3.3%. Partial demand estimates are 24% lower than total estimates due to immigrants and natives locating in the same provinces. The results show that accounting for the impact of immigration on native mobility is central to understanding net demand adjustments, as partial and total effects can significantly differ depending on native population relocation. Keywords: Immigration; House prices; Spain (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:regeco:v:100:y:2023:i:c:s0166046223000285 DOI: 10.1016/j.regsciurbeco.2023.103893 Access Statistics for this article Regional Science and Urban Economics is currently edited by D.P McMillen and Y. Zenou More articles in Regional Science and Urban Economics from Elsevier |
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