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Estimating Neighborhood Choice Models: Lessons from a Housing Assistance Experiment †

Estimating Neighborhood Choice Models: Lessons from a Housing Assistance Experiment † Abstract We use data from a housing-assistance experiment to estimate a model of neighborhood choice. The experimental variation effectively randomizes the rents which households face and helps identify a key structural parameter. Access to two randomly selected treatment groups and a control group allows for out-of-sample validation of the model. We simulate the effects of changing the subsidy-use constraints implemented in the actual experiment. We find that restricting subsidies to even lower poverty neighborhoods would substantially reduce take-up and actually increase average exposure to poverty. Furthermore, adding restrictions based on neighborhood racial composition would not change average exposure to either race or poverty. (JEL I32, I38, R23, R38 ) http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png American Economic Review American Economic Association

Estimating Neighborhood Choice Models: Lessons from a Housing Assistance Experiment †

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Publisher
American Economic Association
Copyright
Copyright © 2015 by the American Economic Association
Subject
Articles
ISSN
0002-8282
DOI
10.1257/aer.20120737
Publisher site
See Article on Publisher Site

Abstract

Abstract We use data from a housing-assistance experiment to estimate a model of neighborhood choice. The experimental variation effectively randomizes the rents which households face and helps identify a key structural parameter. Access to two randomly selected treatment groups and a control group allows for out-of-sample validation of the model. We simulate the effects of changing the subsidy-use constraints implemented in the actual experiment. We find that restricting subsidies to even lower poverty neighborhoods would substantially reduce take-up and actually increase average exposure to poverty. Furthermore, adding restrictions based on neighborhood racial composition would not change average exposure to either race or poverty. (JEL I32, I38, R23, R38 )

Journal

American Economic ReviewAmerican Economic Association

Published: Nov 1, 2015

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