Working Paper: CEPR ID: DP6175
Authors: Pieter A. Gautier; Arjen Siegmann; Aico van Vuuren
Abstract: Does Islamic terrorism have an effect on the general attitudes towards Muslim minorities? We use the murder of Theo van Gogh as an event study to address this question. Specifically, we use the hedonic-market model and test for an effect on listed house prices in neighbourhoods where more than 25% of the people belong to an ethnic minority from a Muslim country (type I). Relative to the other neighbourhoods, house prices in type I neighbourhoods decreased in 10 months by about 3%, with a widening gap over time. We use a unique weekly data set from a multi listing service that contains over 70% of all houses for sale and obtain the actual transaction prices from the registers office. Our results are robust to several adjustments including changes in the control group. There is no significant difference in the time it takes for houses to be sold in type I versus other neighbourhoods. Finally, we find evidence that segregation increased. People belonging to the Muslim minority were more likely to buy and less likely to sell a house in a type I neighbourhood after the murder than before.
Keywords: Economics of Terror; Housing Market; Hedonic Market Method; Differences in Differences
JEL Codes: C21; C41; C81; R31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Murder of Theo van Gogh (B32) | House prices in Type I neighborhoods (R31) |
| Murder of Theo van Gogh (B32) | Perceptions of living in Type I neighborhoods (R23) |
| Murder of Theo van Gogh (B32) | Increased segregation in Type I neighborhoods (R23) |
| House prices in Type I neighborhoods (R31) | Time to sell houses in Type I neighborhoods (R31) |