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Urban Inequality

Paper Session

Saturday, Jan. 5, 2019 10:15 AM - 12:15 PM

Hilton Atlanta, 204
Hosted By: American Real Estate and Urban Economics Association
  • Chair: Christian Redfearn, University of Southern California

Designing for Racial Impartiality: The Impact of Relocating Host Photos on the Airbnb Website

Shariq Mohammed
University of Michigan


A growing body of evidence from research studies, as well as recent media reports, has shown that the online sharing economy is no less prone to racially charged practices than in-person economic interactions. When it comes to corrective measures, however, we know little about what strategies can mitigate racial discrimination on these newly evolving platforms. This paper contributes to the literature by testing a widely held perception that, in an online marketplace, making racial identity less prominent (as opposed to completely eliminating it) will reduce discrimination. I evaluate a recent website redesign policy of Airbnb that reduced the salience of racial identity by delaying the exposure of guests to hosts’ profile photos. I analyze daily bookings and price data for hosts from four U.S. cities. I find clear evidence of a narrowing of the racial bookings gap among New York City (NYC) hosts. Specifically, I find that the black-white gap in log-expected bookings reduced by 0.09. This finding suggests that the black-white ratio of average bookings increased from about 0.71 to 0.79, which is closer to the non-discrimination proportion of 1. The reduction in racial gap is robust to comparing black hosts with white hosts, non-black hosts from all races, and hosts whose profile photo did not show their face. The reduction in racial gap was greater for male hosts and hosts that listed a shared apartment unit. While the effect is large and statistically significant in NYC, it is less so in the other three cities. An analysis of over two million guests that visited these cities suggests that the effect of the website redesign policy was negatively correlated with the share of guests originating in the United States.

Win or Lose: Residential Sorting After a School Choice Lottery

Stephen Billings
University of Colorado
Andrew Bibler
University of Alaska-Anchorage


"Typically, studies of school choice lotteries show large gains in school quality and better long-term outcomes for winners. In practice, losers may compensate by opting out of the public school system, obtaining after hours tutoring, attending a magnet school or relocating to another neighborhood with a higher quality home school. The research presented here examines residential relocation and opting out of the public school system in response to the results of a school choice lottery. We show that rising kindergarten and sixth grade students who lose a school choice lottery are about 6 percentage points more likely to exit the
district or change neighborhood schools (30% increase) and make up 0.25-0.28 standard deviations in average school test scores between lottery assignment and attendance the following year. Using hedonic-based estimates of land prices, we estimate a 10% to 14% housing price premium for access to a school with a one standard deviation higher mean test score for families that have a high and immediate demand for better quality schools."

Regional Inequality in the U.S.: Evidence from City-level Purchasing Power

C.Y. Choi
University of Texas-Arlington
Alex Chudik
Federal Reserve Bank of Dallas


This paper investigates the empirical facts and the drivers of regional inequality in the U.S. using a micro panel dataset of city-level purchasing power for 43 products in 41 cities over the period 1990.Q1-2015.Q4. We focus on two questions: (i) how widely is purchasing power dispersed among U.S. cities and how has the geographic dispersion evolved over time; and (ii) what factors are
associated with the fluctuations in the purchasing power and with the evolution of the geographic disparities. We find a large cross-city dispersion in the purchasing power and the geographic dispersion has been on the rise for the sample period. Our analysis based on a Global VAR (GVAR)
representation reveals that common national shocks account for about 30-35% of the variance of fluctuations in local purchasing power. The impulse responses to national shocks show differing magnitudes depending on the product and city characteristics, with greater effects in high-skilled
cities and for products that have more flexible pricing. For the growing geographic disparities of purchasing power, we find some main macroeconomic variables, such as national GDP or total factor productivity (TFP), have predictive power on the rise in regional inequality. The predictability of macroeconomic variables, however, varies significantly with the characteristics of products and
cities. Our subsample analysis suggests the regional inequality observed in the data might have proceeded in the cities with higher concentration of skilled workers and higher income over time primarily through the products with more flexible price adjustments.

Immigration and the Displacement of Incumbent Households

Kristian Blickle
University of St. Gallen
Zeno Adams
University of St. Gallen


We make use of information on the universe of immigrants to arrive in Switzerland between 1991 and 2013, regional house price and wage data, as well as details on individual Swiss households to show that incumbent families relocate in the presence of immigrants. While the effects of immigration on house prices and wages are heterogeneous, depending strongly on the characteristics of immigrants and incumbent households, we nevertheless document positive aggregate house and wage responses to immigration. We show that the decision of households to relocate instead seems rooted in homophily/sentiment about immigration. Our research provides valuable insights into some of the effects of large-scale immigration.
Shawn M. Rohlin
Kent State University
Tsur Somerville
University of British Columbia
Anthony Orlando
California State Polytechnic University-Pomona
Chris Cunningham
Federal Reserve Bank of Atlanta
JEL Classifications
  • R2 - Household Analysis
  • E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy