American Economic Review Vol. 105 No. 11 2015

Estimating Neighborhood Choice Models: Lessons from a Housing Assistance Experiment

Sebastian Galiani¹; Alvin Murphy²; Juan Pantano³

¹ Department of Economics, University of Maryland, Tydings Hall, College Park, MD 20742 (e-mail: ) · ² Department of Economics, Arizona State University, PO Box 879801, Tempe, AZ 85287 (e-mail: ) · ³ Department of Economics, Washington University in St. Louis, Campus Box 1208, One Brookings Drive, Saint Louis, MO 63130 (e-mail: )

Abstract

We use data from a housing-assistance experiment to estimate a model of neighborhood choice. The experimental variation effectively randomizes the rents which households face and helps identify a key structural parameter. Access to two randomly selected treatment groups and a control group allows for out-of-sample validation of the model. We simulate the effects of changing the subsidy-use constraints implemented in the actual experiment. We find that restricting subsidies to even lower poverty neighborhoods would substantially reduce take-up and actually increase average exposure to poverty. Furthermore, adding restrictions based on neighborhood racial composition would not change average exposure to either race or poverty.

DOI

10.1257/aer.20120737

Volume

105

Issue

11

Pages

3385-3415

Language

en

Sources

openalex crossref bibtex:phds-export.bib

Cite

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