Essays on residential desegregation

Many ethnically diverse countries have policies that encourage integration across ethnic groups. This dissertation investigates the impact and welfare implications of a residential desegregation policy in Singapore, the ethnic housing quotas. I employ both reduced form and structural form methods. In Chapter 1, I use regression discontinuity analysis to estimate the impact of the quota on prices, quantity and quality of units sold. Because an individual's decision on where to locate affects ethnic distributions in aggregate, these externalities suggest that any decentralized equilibrium may not be optimal. To find the first best, just using housing prices is not sufficient because prices do not internalize the externalities. We need to know the shapes of household's preferences. In chapter 2, I use a structural demand estimation framework to estimate taste for living with own ethnic group neighbors. Finally, using these preference estimates, I simulate the first best equilibrium and compare it to the existing equilibrium with quotas.I find that all quotas have significant negative impact on the proportion of units sold at the quota cutoffs. Malay-constrained units are 5% cheaper perhaps because the units sold are also of lower quality. The impact on the price and quality of Chinese- and Indian-constrained units are opposite. Chinese-constrained units are 7% more expensive even though the units sold are of significantly worse quality. Indian-constrained units are 2% cheaper even though the units sold are of a higher quality.