Premium
ECONOMIC IMPACTS OF CULTURAL DIVERSITY IN THE NETHERLANDS: PRODUCTIVITY, UTILITY, AND SORTING *
Author(s) -
Bakens Jessie,
Mulder Peter,
Nijkamp Peter
Publication year - 2013
Publication title -
journal of regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.171
H-Index - 79
eISSN - 1467-9787
pISSN - 0022-4146
DOI - 10.1111/jors.12012
Subject(s) - diversity (politics) , productivity , sorting , immigration , economics , cultural diversity , economic geography , consumption (sociology) , panel data , demographic economics , labour economics , geography , economic growth , econometrics , sociology , social science , archaeology , anthropology , computer science , programming language
This paper identifies the impact of cultural diversity on local economies, by explaining spatial disparities in wages and housing prices across Dutch cities using unique individual panel data of homeowners during the period 1999 and 2008. We distinguish between the effects of spatial sorting based on individual heterogeneity, interactions‐based productivity effects, and consumer amenities while controlling for interactions between the labor and housing market. In line with previous literature, we find a positive effect of cultural diversity on average housing prices. After controlling for spatial sorting, the effect of cultural diversity on housing prices is negative. The negative impact of cultural diversity on local housing markets is likely driven by a causal effect between the presence of immigrants and neighborhood quality that outweighs a positive effect of immigrant‐induced diversity in consumption goods.