Estimating Housing Demand with an Application to Explaining Racial Segregation in Cities

38 Pages Posted: 5 Aug 2003 Last revised: 9 May 2015

See all articles by Patrick Bajari

Patrick Bajari

University of Michigan at Ann Arbor - Department of Economics; National Bureau of Economic Research (NBER)

Matthew E. Kahn

University of Southern California; National Bureau of Economic Research (NBER)

Date Written: August 2003

Abstract

We present a three-stage estimation procedure to recover willingness to pay for housing attributes. In the first stage, we estimate a non-parametric hedonic home price function. Second, we recover each consumer's taste parameters for product characteristics using first order conditions for utility maximization. Finally, we estimate the distribution of household tastes as a function of household demographics. As an application of our methods, we compare alternative explanations for why blacks choose to live in center cities while whites suburbanize.

Suggested Citation

Bajari, Patrick and Kahn, Matthew E., Estimating Housing Demand with an Application to Explaining Racial Segregation in Cities (August 2003). NBER Working Paper No. w9891. Available at SSRN: https://ssrn.com/abstract=430605

Patrick Bajari (Contact Author)

University of Michigan at Ann Arbor - Department of Economics ( email )

611 Tappan Street
Ann Arbor, MI 48109-1220
United States
734-763-5319 (Phone)

HOME PAGE: http://www-personal.umich.edu/~bajari/

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States

Matthew E. Kahn

University of Southern California ( email )

2250 Alcazar Street
Los Angeles, CA 90089
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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