Is the housing market blind to religion? A perceived substitutability approach to homophily and social integration

Nema Dean and Gwilym Pryce
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Nema Dean: University of Glasgow, UK

Urban Studies, 2017, vol. 54, issue 13, 3058-3070

Abstract: Housing markets are unlikely to be impervious to the preferences and prejudices associated with urban segregation. For example, two neighbourhoods with very different religious attributes are unlikely to be perceived as close substitutes by homebuyers that have a strong preference for neighbours of a particular religion. This paper offers a new framework for the conception and measurement of social integration, defined in terms of perceived homophily. Homophily is the tendency for links to form between similar nodes in a network and we can think of perceived homophily as the tendency for any pair of neighbourhoods to be considered by the housing market to be close substitutes. Textbook economic theory suggests that we should expect the degree of perceived substitutability to affect cross-price elasticities. These can be measured empirically to reveal discontinuities in the network of perceived substitutability of different housing locations. Applying homophily coefficients to substitutability measures allows us to estimate perceived religious homophily between neighbourhoods. The approach can be applied to any city or region that has geocoded house transactions and socio-demographic data. We illustrate the method using data on Glasgow and find strong evidence of religious homophily. This suggests an underlying lack of social integration/cohesion and implies that the Glaswegian housing market is by no means blind to religion.

Keywords: homophily; house prices; neighbourhood mix; social cohesion; substitutability; å Œç±»ç›¸å ¸; æˆ¿å±‹ä»·æ ¼; è¡—åŒºæ··å ˆ; ç¤¾ä¼šå‡ è šåŠ›; å ¯æ›¿ä»£æ€§ (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:sae:urbstu:v:54:y:2017:i:13:p:3058-3070

DOI: 10.1177/0042098016668779

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