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The Effect of the Theo van Gogh Murder on House Prices in Amsterdam

Pieter Gautier (), Arjen Siegmann () and Aico van Vuuren ()

No 6175, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Does Islamic terrorism have an effect on the general attitudes towards Muslim minorities? We use the murder of Theo van Gogh as an event study to address this question. Specifically, we use the hedonic-market model and test for an effect on listed house prices in neighbourhoods where more than 25% of the people belong to an ethnic minority from a Muslim country (type I). Relative to the other neighbourhoods, house prices in type I neighbourhoods decreased in 10 months by about 3%, with a widening gap over time. We use a unique weekly data set from a multi listing service that contains over 70% of all houses for sale and obtain the actual transaction prices from the registers office. Our results are robust to several adjustments including changes in the control group. There is no significant difference in the time it takes for houses to be sold in type I versus other neighbourhoods. Finally, we find evidence that segregation increased. People belonging to the Muslim minority were more likely to buy and less likely to sell a house in a type I neighbourhood after the murder than before.

Keywords: hedonic market method; differences in differences; economics of terror; housing market (search for similar items in EconPapers)
JEL-codes: C21 C41 C81 R31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ure
Date: 2007-03
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Working Paper: The Effect of the Theo van Gogh Murder on House Prices in Amsterdam (2007) Downloads
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