What's in a Label? On Neighbourhood Labelling, Stigma and Housing Prices

Henrik Andersson, Ina Blind, Fabian Brunåker, Matz Dahlberg, Greta Fredriksson, Jakob Granath and Che-Yuan Liang

No xu759, SocArXiv from Center for Open Science

Abstract: In an attempt to identify local areas at risk, the Swedish police classifies a selected set of marginalised neighbourhoods as ``vulnerable''. The classification, first used in 2015, spurs a lot of public debate, and have been hypothesised to shape the perception of localities, potentially stigmatising neighbourhoods. We study the short to long term effect on housing prices (up to six years) of the initial classification. Implicitly, we thereby study the effect of assigning negative labels to neighbourhoods, something that we believe is often an inherent part of area-based policies. Using the synthetic control method, we find that being labelled as vulnerable caused average housing prices in the designated neighbourhoods to drop with around 3.7% in the short run and about 6.5% in the long run. In line with ideas of racial stigma, we also find that areas with a larger share of minorities (pre-classification) where more negatively affected.

Date: 2023-07-13
New Economics Papers: this item is included in nep-ure
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Working Paper: What's in a Label? On Neighbourhood Labelling, Stigma and Housing Prices (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:osf:socarx:xu759

DOI: 10.31219/osf.io/xu759

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