Rent Discrimination in Sarajevo

Recai Aydin, Sejma Aydin
Turkish Police Academy, International University of Sarajevo,

Abstract: Following the relative stabilization of the country after Dayton Peace agreement, B&H has been attracting growing number of foreigners who come to Bosnia for work or education. In recent years, Ilidza area of Sarajevo city has faced with an influx of such foreigners due to recently established university campuses in the area. This development caused large number of foreign students and professors, mostly from Turkey, to reside in and around Ilidza. This study investigates if these foreign students and professors face with discrimination in the rental market, using Oaxaca-Blinder decomposition method as a statistical tool. Ordinary least square (OLS) regressions under different specifications were applied and all of them revealed a significant coefficient for "foreign" dummy, indicating a significant difference between what locals pay and foreigners pay for the rent among IUS students and staff members. Further analysis with Oaxaca-Blinder decomposition method indicated that foreigners pay higher amount of rent in the area as they generally reside in better quality apartments. However, the difference in rent cannot be completely explained with the characteristics of the rental unit. Hence, this study finds an evidence of rental discrimination. The results are found to be similar when only student sample is used by excluding the staff members.

Keywords: Rental Discrimination, Oaxaca-Blinder Decomposition.
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