Abstract
We analyse the effects of the Dutch Act on Extraordinary Measures for Urban Problems. This allows local governments to prohibit non-employed households from entering into public housing in targeted neighbourhoods to improve social mixing. We show that the Act is largely ineffective in changing the demographic composition of neighbourhoods. At the same time, due to prominent advertising of targeted deprived neighbourhoods, a stigma may have been created. We adopt a hedonic price approach and use a boundary-discontinuity (within 100 m of neighbourhood borders) to quantify the overall effect of the policy. We thus exploit spatio-temporal differences in house prices and find a sizeable price reduction of about 3–5%. The magnitude of this effect is confirmed for two other national place-based policy programmes, adding to the external validity of these findings. Our results suggest that neighbourhood stigma is important, which implies that individuals living in deprived neighbourhoods experience dis-utility from living in a place with a low status.
| Original language | English |
|---|---|
| Pages (from-to) | 289-339 |
| Number of pages | 51 |
| Journal | ECONOMIC POLICY |
| Volume | 38 |
| Issue number | 114 |
| Early online date | 29 Jul 2022 |
| DOIs | |
| Publication status | Published - 1 Apr 2023 |
Bibliographical note
Funding Information:We thank the editor, Isabella Mejean, the two discussants Mathieu Couttenier and Monika Mrázová and two anonymous referees. We further thank the participants of the 75th Economic Policy Panel Meeting in Paris, as well as a seminar at the University of Luxembourg, and the BVRN Workshop at the University of Birmingham for very useful comments. Stuart Rosenthal is also thanked for useful insights in the early stages of this project.
Publisher Copyright:
© CEPR, CESifo, Sciences Po, 2022.
Funding
We thank the editor, Isabella Mejean, the two discussants Mathieu Couttenier and Monika Mrázová and two anonymous referees. We further thank the participants of the 75th Economic Policy Panel Meeting in Paris, as well as a seminar at the University of Luxembourg, and the BVRN Workshop at the University of Birmingham for very useful comments. Stuart Rosenthal is also thanked for useful insights in the early stages of this project.