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Paper eres2016_109:
Immigration and Rental Prices of Residential Housing: Evidence from the Fall of the Berlin Wall

id eres2016_109
authors Kuerschner, Kathleen
year 2016
title Immigration and Rental Prices of Residential Housing: Evidence from the Fall of the Berlin Wall
source 23rd Annual European Real Estate Society Conference in Regensburg, Germany
summary The fall of the Berlin Wall on 9th November 1989 sparked a mass exodus of East Germans to West Germany. This paper exploits the natural experiment provided by the unexpected disintegration of socialist East Germany to study the impact that immigration has on residential housing rents in recipient regions. Using a spatial correlation approach, annual district-level migration data for 1991 and 1992 and unique rental price indicators from Germany's major regional property market information system; we find strong evidence for a positive and sizeable effect of immigration on rental prices of residential housing. A one percent population increase due to immigration is associated with an approximate increase in minimum and average category rents by 4.8 and 3.3 %, respectively. Additional explorations that employ an IV approach based on various exogenous origin-region push factors related to the deteriorating economic conditions in East Germany yield estimates of even larger magnitude. These results suggest that immigration has important economic effects outside the labour market, traditionally the prime domain of economic enquiries into the consequences of immigration. Our findings cast doubt on the appropriateness of this bias in focus.
series ERES:conference
type paper session
discussion No discussions. Post discussion ...
ratings
session Housing Economics & Housing Policy
last changed 2017/11/18 16:16
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