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Housing Prices and Segregation: The Case of Social Frontiers

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Journal of Regional Science

Published online on

Abstract

["Journal of Regional Science, Volume 66, Issue 2, Page 516-541, March 2026. ", "\nABSTRACT\nResidential segregation has become an increasingly prevalent feature of many European cities. This paper studies a special type of residential segregation—known as a social frontier—which arises from abrupt spatial divisions between the population composition of different neighboring groups. Although related “borders models” have been previously studied, both theoretically and empirically, the current work presents the first attempt to quantify the capitalization of social frontiers into housing prices by using the hedonic approach. While prior studies have used arbitrary measures and limits to distinguish between neighborhoods, the current study combines a Bayesian spatial conditional autoregressive model with Norwegian register data to identify ethnic social frontiers in the Oslo travel‐to‐work area, before applying hedonic modeling to individual house sale transaction data in the region. In this way, social frontiers have been identified in the study area, and results show that these frontiers are locally capitalized in housing prices. The paper's main result comes in the identification of price gradients that manifest themselves asymmetrically as one moves towards (or away from) the frontier itself. On the native‐dense side of the frontier, prices were lowest in the immediate vicinity of the frontier and rose nonlinearly with increased distance, whereas the opposite was true on the immigrant‐dense side of the frontier. Given the importance of housing prices in determining the spatial distribution and residential mobility patterns of peoples, these findings support the notion that a social frontiers framework may help to further our knowledge of the complex landscape of residential segregation.\n"]