Scandinavian Working Papers in Economics

Working Paper Series,
Royal Institute of Technology, Department of Real Estate and Construction Management & Banking and Finance

No 20/6: Do segregated housing markets have a spillover effect on housing prices in nearby residential areas?

Mohammad Ismail (), Abukar Warsame () and Mats Wilhelmsson ()
Additional contact information
Mohammad Ismail: Department of Real Estate and Construction Management, Royal Institute of Technology, Postal: Division of Real Estate Economics and Finance, Teknikringen 10B, 100 44 Stockholm, Sweden
Abukar Warsame: Department of Real Estate and Construction Management, Royal Institute of Technology, Postal: Division of Real Estate Economics and Finance, Teknikringen 10B, 100 44 Stockholm, Sweden
Mats Wilhelmsson: Department of Real Estate and Construction Management, Royal Institute of Technology, Postal: Division of Real Estate Economics and Finance, Teknikringen 10B, 100 44 Stockholm, Sweden

Abstract: From an international perspective, housing segregation in Sweden is considered relatively low. However, in recent years the issue has been raised and problematized. For example, some studies show that ethnic housing segregation increased in 199 of Sweden's 285 municipalities during the years 2005- 2015. The purpose of this project is to analyze the trends regarding housing segregation over the past 10-20 years, and whether housing segregation has a spillover effect on neighboring housing areas. Namely, does proximity to a specific type of segregated housing market has a negative impact, while another type of segregation has a positive impact, on nearby housing markets. The results indicate that segregation measured as income sorting has increased over time in some of the housing markets. Its effects on housing values in neighboring housing areas are significant and statistically significant.

Keywords: segregation; spillover effect; housing values

JEL-codes: R20; R23; R30

23 pages, June 5, 2020

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