Scandinavian Working Papers in Economics

Working Paper Series,
Stockholm University, Swedish Institute for Social Research

No 9/2023: Discrimination and Sorting in the Real Estate Market: Evidence from Terror Attacks and Mosques

Louis-Pierre Lepage ()
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Louis-Pierre Lepage: Swedish Institute for Social Research, Stockholm University, Postal: SOFI, Stockholm University, SE-106 91 Stockholm, Sweden

Abstract: I evaluate the impact of Islamist terrorist attacks, taken as exogenous shocks which may change individual perceptions towards Middle Easterners and Muslims, on the real-estate market. Using detailed property-level transactions data, I find that US property prices immediately near mosques fell by 5% in the two years following 9/11. I find little evidence of changes in the number of transactions, but an increase of up to 30% in the fraction of Middle Eastern and North African households locating near mosques, indicating increased ethnic and religious sorting from 9/11. Additional evidence suggests that price decreases across areas are in line with increased prejudice.

Keywords: housing market; terrorism; household sorting; discrimination

JEL-codes: J15; R30

Language: English

63 pages, April 30, 2024

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