Wednesday, May 13, 2026 12:30 - 14:00

This event is both online and in person.

SAL 1.04, 1st Floor Conference Room, Sir Arthur Lewis Building, LSE, 32 Lincoln's Inn Fields, London WC2A 3PH

Online participants are welcome:
Please sign up to our mailinglist (seminar_macroiep) to receive event updates and a link to the seminar online.

About this event

How much of the observed house price differentials and household sorting is due to restrictions in choice sets, arising from implicit and explicit forms of discrimination, versus household preferences? To answer this question, we build a two-sided housing matching model that combines admission rules with traditional discrete choice models, allowing for heterogeneous choice sets across demographic groups. Additionally, we construct a novel dataset that links households and real-estate developments to the historic street grid of the 1940 Minneapolis metro area. Using an instrumental variable approach, we find that explicit discriminatory restrictions in neighborhoods reduce the likelihood of non-White and White Eastern and Southern European immigrant households by 10 and 2.8 percentage points, respectively. We also show that traditional discrete-choice models of neighborhood demand with misspecified choice sets can yield biased estimates of preferences for neighborhood characteristics, especially when there is selection in the characteristics of neighborhoods restricted to a subset of residents. Our two-sided housing matching model jointly estimates heterogeneous choice sets and preference parameters, revealing that different demographic groups faced substantially different choice sets. On average, minority households are 8 percentage points less likely to have a neighborhood in their choice set than non-minority households, even after controlling for explicit forms of discrimination and rents. Simulating a counterfactual scenario without these restrictions and preferences for co-patrons, we find that household preferences account for three-quarters of the observed segregation in 1940.

Participants are expected to adhere to the CEP Events Code of Conduct.

Directions

This event will take place in SAL 1.04, 1st Floor Conference Room, Sir Arthur Lewis Building, LSE, 32 Lincoln's Inn Fields, London WC2A 3PH.

Online participants are welcome:
Please sign up to our mailinglist (seminar_macroiep) to receive event updates and a link to the seminar online.

The building is labelled SAL on the LSE campus map. You can also find us on Google Maps. For further information, go to contact us.

Trade and Urban Seminars are part of the CEP's Trade programme and Urban programme.