Muslims Should Know This

"after the Murder of filmmaker and journalist Theo van Gogh, house prices in neighborhoods with morethan 25% Muslims decreased with about 0.1 to 0.2 percent per week relativelyto the other neighborhoods in Amsterdam"

Via Stumbling and Mumbling, an interesting working paper-The Effect of the Theo van Gogh Murder on House Prices in Amsterdam by Pieter Gautier, Arjen Siegmann, Aico van Vuuren;

"This paper estimates the impact of the murder of film maker Theo van Gogh on November 2, 2004, on listed house prices in Amsterdam with a unique dataset. We use an hedonic-market approach to show that general attitudes towards Muslim minorities were negatively affected by the murder. Specifically, we test for an effect on listed house prices in neighborhoods where more than 25% of the people belong to an ethnic minority from a Muslim country (type I). Relative to the other neighborhoods, house prices in type I neighborhoods decreased in 10 months by about average 3%, with a widening gap over time. The 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 neighborhoods. Finally, people belonging to the Muslim minority were more likely to buy and less likely to sell a house in a type I neighborhood after the murder than before"

One novelty of the paper;

"We use a difference-in-difference (DID) approach to identify the impact of the murder. This approach has become very popular in labor and development eco nomics. The only other paper that applies DID to the housing market is Abadie and Dermisi (2006). Many of the problems related to this method are less severe for the housing market. This is due to the fact that houses are fixed and cannot move between neighborhoods. Therefore, we do not have to worry about mobility between the treatment and control group (see for example Blundell and Costa-Dias, 2000). In addition, the murder can be regarded as an unanticipated and exogenous event. Difference-in-difference methods have often been applied to study policy changes where it is always questionable whether the policy changes are really exogenous. Still, serial correlation is a potential problem for reasons pointed out in (Bertrand, Duflo and Mullainathan, 2004). We deal with this in our robustness checks. Another fundamental problem in cross sectional neighborhood-effect studies is to distinguish between a neighborhood effect and the aggregation of individual effects: the so called reflection problem, see Manski (1993, 2000). However, we are not so much interested in identifying neighborhood effects but more in the effects of the Van Gogh murder (which can be treated as an unexpected event) on different neighborhoods."

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