Endogenous segregation dynamics and housing market interactions: An ABM approach

Arbeitspapier

In contrast to previous research, I hypothesize that residential segregation patterns do not only result from an individual's perception of different ethnicities, but is rather affected by housing market interactions and socioeconomic endowment, like income and education. I implement a theoretical agent-based model, which contains three main features: agents' socioeconomic endowment, the quantification of one's Willingness-to-Stay within a neighborhood and housing market interactions if an agent decides to move. The results indicate that housing market interactions, the valuation of socioeconomic factors, but also the increasing share of minority groups diminish the absolute level of racial segregation. The analysis shows that house price clusters dominate urban areas, since individuals have an incentive to stay in more expensive neighborhoods in which they made a bargain. An increase in house price segregation can be observed if individuals strongly undervalue their own house and if individuals have higher access to credit. I can show that these market interactions lead to lock-in effects for low-income individuals, since they lack the necessary budget and suffer under negative equity. Thus, residential segregation shows a strong dependency on housing market interactions and is more complex than presumed by Schelling's Spatial Model or the White Flight Hypothesis.

Object Details

• ISBN: 978-3-86788-950-6
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Ruhr Economic Papers ; No. 819

Classification and Topics

• Classification: Wirtschaft ; Computational Techniques; Simulation Modeling ; Urban, Rural, Regional, Real Estate, and Transportation Economics: Housing Demand ; Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics
• Subject: agent-based modelling ; residential choice ; housing demand ; neighborhood characteristics ; segregation

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Bonakdar, Said Benjamin
• Event: Veröffentlichung
• (who): RWI - Leibniz-Institut für Wirtschaftsforschung
• (where): Essen
• (when): 2019

Further information

• DOI: doi:10.4419/86788950
• Handle: http://hdl.handle.net/10419/203167
• Last update: 10.03.2025, 11:42 AM CET