Microeconomics Seminar with Jesse Gregory (Wisconsin University)

We estimate the parameters of a rich location-choice model in which households care about both the intrinsic, permanent amenities of the neighborhood they live in as well as the racial composition of the residents in that neighborhood. We estimate household preferences for race using a new instrumental-variables approach, and find that many households have strong preferences over the racial composition of their neighborhood. Preferences for race are so strong that the current demographic mix of many neighborhoods in many metro areas is unstable: A small change in demographic composition of one neighborhood in a metro area can cause (over time) widespread change in demographics in many neighborhoods in that metro area. We are concerned that small pilot experiments may not accurately predict the consequences of large changes in policy that are designed to move people around.

Seminar will be in-person. Please sign up for our seminars listserv to receive the details.