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: June 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 housing transactions data from the Netherlands over the period 1990-2015, 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 over the past decade, in line with an increasing share of nationalist votes. Using micro-data on home buyers' characteristics, we further identify households' preferences and find that the willingness to pay (WTP) is more negative for larger RCs. The WTP of foreign-born households is more positive, which is indicative of a more positive attitude towards refugees.