Capitalization of neighbourhood diversity and segregation

In this paper we study how concentrations and diversity of different groups of households were reflected in the housing prices of neighbourhoods in the Oslo urban area, Norway. The focus is primarily on the settlement pattern of immigrants, but the analysis controls for socioeconomic and demographic characteristics. Based on a hedonic conditional autoregressive spatial model formulation, we find that households on average prefer neighbourhoods with a high concentration of natives, many immigrants from Western countries and, at the same time, a diverse, thin representation of neighbours from a wide range of countries. We do not find that immigrants from specific countries or continents have a substantial negative impact on housing prices in a neighbourhood.