Racial Preferences In A Small Urban Housing Market: A Spatial Econometric Analysis Of Microneighborhoods In Kingston, New York

Date Added: May 2010
Format: PDF

This paper uses spatial econometric models to test for racial preferences in a small urban housing market. Identifying racial preferences is difficult when unobserved neighborhood amenities vary systematically with racial composition. The authors adopt three strategies to redress this problem: they focus on housing price differences across microneighborhoods in the small and relatively homogenous city of Kingston, New York; they introduce GIS-based spatial amenity variables as controls in the hedonic regressions; and they use spatial error and lag models to explicitly account for the spatial dependence of unobserved neighborhood amenities.