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A Note on Housing Market Segmentation in an Israeli Development Town

Department of Economics at the Ben Gurion University of the Negev, Beer Sheva, Israel

Wbile the Israeli experiment in new town development included an attempt to integrate immigrants of disparate African, Asian and European backgrounds, subsequent development patterns indicate that neighbourhood stratification has occurred based upon population origin, date of immigration and local housing conditions. This analysis develops a hedonic price model which enables the specification and testing of the segmentation hypothesis. Disaggregation by neighbourhood reveals significant variation in the magnitude and sign of implicit prices and thus conflicts with the assumption of a unified housing market model.

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