DP14551 A World Divided: Refugee Centers, House Prices, and Household Preferences

Author(s): Martijn Dröes, Hans R.A. Koster
Publication Date: April 2020
Date Revised: December 2020
Keyword(s): House Prices, household preferences, Immigration, refugee centers
JEL(s): E02, O18, R31
Programme Areas: International Trade and Regional Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=14551

Using detailed Dutch housing transactions data for over more than two decades, we examine the disamenity effect associated with the opening of refugee centers (RCs). We show that the opening of an RC decreases local house prices by 3-6%. The effect has become stronger in the past decade, in line with an increasing share of nationalist votes. Furthermore, by using micro-data on home buyers' characteristics and estimating non-parametric hedonic price models, we identify households' preferences. The results show that the willingness to pay (WTP) is more negative for larger RCs. The WTP of foreign-born individuals is more positive, which is indicative of a more positive attitude towards refugees.