Residential income segregation: A behavioral model of the housing market
We represent the functioning of the housing market and study the relation between income segregation, income inequality and house prices by introducing a spatial Agent-Based Model (ABM). Differently from traditional models in urban economics, we explicitly specify the behavior of buyers and sellers...
| Main Authors: | , , |
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| Format: | Journal article |
| Language: | English |
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Elsevier
2019
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| _version_ | 1826273848285200384 |
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| author | Pangallo, M Nadal, J Vignes, A |
| author_facet | Pangallo, M Nadal, J Vignes, A |
| author_sort | Pangallo, M |
| collection | OXFORD |
| description | We represent the functioning of the housing market and study the relation between income segregation, income inequality and house prices by introducing a spatial Agent-Based Model (ABM). Differently from traditional models in urban economics, we explicitly specify the behavior of buyers and sellers and the price formation mechanism. Buyers who differ by income select among heterogeneous neighborhoods using a probabilistic model of residential choice; sellers employ an aspiration level heuristic to set their reservation offer price; prices are determined through a continuous double auction. We first provide an approximate analytical solution of the ABM, shedding light on the structure of the model and on the effect of the parameters. We then simulate the ABM and find that: (i) a more unequal income distribution lowers the prices globally, but implies stronger segregation; (ii) a spike in demand in one part of the city increases the prices all over the city; (iii) subsidies are more efficient than taxes in fostering social mixing. |
| first_indexed | 2024-03-06T22:34:27Z |
| format | Journal article |
| id | oxford-uuid:596435e1-5088-4105-bbb9-02e2ddfd5648 |
| institution | University of Oxford |
| language | English |
| last_indexed | 2024-03-06T22:34:27Z |
| publishDate | 2019 |
| publisher | Elsevier |
| record_format | dspace |
| spelling | oxford-uuid:596435e1-5088-4105-bbb9-02e2ddfd56482022-03-26T17:09:32ZResidential income segregation: A behavioral model of the housing marketJournal articlehttp://purl.org/coar/resource_type/c_dcae04bcuuid:596435e1-5088-4105-bbb9-02e2ddfd5648EnglishSymplectic Elements at OxfordElsevier2019Pangallo, MNadal, JVignes, AWe represent the functioning of the housing market and study the relation between income segregation, income inequality and house prices by introducing a spatial Agent-Based Model (ABM). Differently from traditional models in urban economics, we explicitly specify the behavior of buyers and sellers and the price formation mechanism. Buyers who differ by income select among heterogeneous neighborhoods using a probabilistic model of residential choice; sellers employ an aspiration level heuristic to set their reservation offer price; prices are determined through a continuous double auction. We first provide an approximate analytical solution of the ABM, shedding light on the structure of the model and on the effect of the parameters. We then simulate the ABM and find that: (i) a more unequal income distribution lowers the prices globally, but implies stronger segregation; (ii) a spike in demand in one part of the city increases the prices all over the city; (iii) subsidies are more efficient than taxes in fostering social mixing. |
| spellingShingle | Pangallo, M Nadal, J Vignes, A Residential income segregation: A behavioral model of the housing market |
| title | Residential income segregation: A behavioral model of the housing market |
| title_full | Residential income segregation: A behavioral model of the housing market |
| title_fullStr | Residential income segregation: A behavioral model of the housing market |
| title_full_unstemmed | Residential income segregation: A behavioral model of the housing market |
| title_short | Residential income segregation: A behavioral model of the housing market |
| title_sort | residential income segregation a behavioral model of the housing market |
| work_keys_str_mv | AT pangallom residentialincomesegregationabehavioralmodelofthehousingmarket AT nadalj residentialincomesegregationabehavioralmodelofthehousingmarket AT vignesa residentialincomesegregationabehavioralmodelofthehousingmarket |