Estimating the Distortionary Effects of Ethnic Quotas in Singapore Using Housing Transactions

Wong, Maisy (2013): Estimating the Distortionary Effects of Ethnic Quotas in Singapore Using Housing Transactions.

Abstract

Desegregation is a key policy issue in many countries. I investigate a residential desegregation program in Singapore - the ethnic housing quotas. I show that choice restrictions imposed on apartment blocks above the quota limits (constrained) could have distortionary effects, causing price and quantity differences for constrained versus unconstrained blocks. I test these predictions by hand matching more than 500,000 names in the phonebook to ethnicities, to calculate ethnic proportions at the apartment block level. I can then investigate differences for constrained and unconstrained blocks close to the quota limits and test for sorting around the limits. I find price differences are between 3% and 5%. Quantity effects are economically significant, translating to longer time-on-market durations by 1 to 1.4 months. Selection cannot fully explain these results. My results point to challenges in achieving desegregation using quantity restrictions.

• Item Type: MPRA Paper
• Language: English
• Keywords: Desegregation, quota, distortionary effects, housing transactions
• Subjects: D - Microeconomics > D0 - General > D04 - Microeconomic Policy: Formulation, Implementation, and Evaluation; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R3 - Real Estate Markets, Spatial Production Analysis, and Firm Location > R31 - Housing Supply and Markets; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R3 - Real Estate Markets, Spatial Production Analysis, and Firm Location > R38 - Government Policy

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