Borrowing constraints and location choice - Evidence from the Paris Region

Sophie Dantan and Nathalie Picard

No 2019-05, THEMA Working Papers from THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise

Abstract: This paper investigates the determinants of residential segregation using a nested logit model to disentangle household preferences for local amenities, for dwelling type and for homeownership. The model is extended to account for unobservable borrowing constraints which might prevent some households from purchasing a dwelling. A counterfactual distribution of socio-demographic characteristics across the Paris region is then built by relaxing those constraints. The comparison of the actual and counterfactual distributions suggests that if their credit constraints were alleviated, households would tend to locate further from Paris. In particular if constraints were relaxed only on the poorest households, they would not be likely to mix with the richest households.

Keywords: Homeownership; Tenure choice; Borrowing constraints; Residential segregation; Suburbanization; Urban sprawl; Location choice model; Endogenous choice sets. (search for similar items in EconPapers)
JEL-codes: R21 R23 R31 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-dcm, nep-eur, nep-geo, nep-mig and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:ema:worpap:2019-05

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