In consumer cities, the presence and location of immigrants impacts house prices through two channels, which both can be valued positively as well as negatively: (i) their presence and contribution to population diversity and (ii) the creation of immigrant-induced consumer amenities like those associated with ethnic restaurants in terms of both their quantity as well as diversity. We hypothesize that these two mechanisms create a trade-off in which city dwellers want to live apart yet consume together. We use unique microdata of house prices and ethnic restaurants in the city of Amsterdam over the 1996-2011 period and a generalized propensity score (GPS) matching technique for multiple continuous treatments to estimate the trade-off between consumers' love for ethnic goods and their variety on the one hand, and ethnic residential composition on the other hand. We find evidence for the existence of such a trade-off: proximity to ethnically diverse restaurants indeed compensates for a negative correlation between the presence of immigrants and house prices. This trade-off mostly holds for neighborhoods featuring both a diverse population and a high level of amenities in terms of restaurants.
|Number of pages||16|
|Journal||Environment and Planning B: Urban Analytics and City Science|
|Early online date||8 Apr 2022|
|Publication status||Published - Oct 2022|
- d12 - Consumer Economics: Empirical Analysis
- d62 - Externalities
- j15 - "Economics of Minorities, Races, and Immigrants; Non-labor Discrimination"
- r10 - General Regional Economics (includes Regional Data)
- hedonic pricing
- propensity score matching