The London Bombings and Racial Prejudice: Evidence from Housing and Labour Markets

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This paper investigates the impact of the London bombings on attitudes toward ethnic minorities, examining outcomes in housing and labor markets across London boroughs. We use a difference-in-differences approach, specifying “treated” boroughs as those with the highest concentration of Asian residents. Our results indicate that house prices in treated boroughs fell by approximately 2% in the 2 years after the bombings relative to other boroughs, with sales declining by almost 6%. Furthermore, we present evidence of a rise in the unemployment rate in treated compared to control boroughs, as well as a rise in racial segregation.
Original languageEnglish
Pages (from-to)276-293
Number of pages18
JournalEconomic Inquiry
Issue number1
Early online date27 Aug 2014
Publication statusPublished - Jan 2015

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