Association for Public Policy Analysis & Management

Housing market segmentation theory posits that geographical and property attributes affect market segmentation. This study provides an alternative hedonic price model for analyzing the dynamics of rental markets, which adds transactional attributes, including the ethnic characteristics of both landlords and tenants. Based on a comparison of two online rental markets in Northern Queens, New York, the study finds that the rental market is segmented by immigrant landlords’ self-choices, which causes a price discount for listed rents on a rental submarket for immigrants. Especially, a spatial hedonic price model using Geographically Weighted Regression (GWR) analysis examines that the price differentiation is associated with the concentration of diverse immigrant populations, proximity to Korean amenities, and the distribution of rent properties owned by Korean landlords. The study contributes to the theory of housing market segmentation by incorporating transactional characteristics as a third set of factors that may influence market segmentation, in addition to geographical and property attributes.