Neighbors ethnicity and socio-economic status forming residential preferences in a post-Soviet city

Segregation literature typically assumes that the urban districts with a high share of immigrant population are the most deprived areas in cities from where some people escape and where others are trapped. In our study, we analyse the residential preferences among the host (Estonian) and minority (Russian-speaking) population in Tartu, a medium-sized post-Soviet city, by comparing the revealed preferences of two major ethnic groups to classical minority and majority segregation models (spatial assimilation, ethnic enclave, white-avoidance explanations). We use the data of a regular municipal surveys from 1998 and 2008 and apply bivariate probit models to demonstrate how the attitudes towards the ethnicity and wealth of potential neighbors form preferences. Most importantly, the results demonstrate that although the residential preferences towards ethnicity and socioeconomic status are interrelated decisions, both choice components also occur independently. People with higher social status among both groups prefer affluent neighborhoods irrespective of ethnic environment. However, irrespective of how wealthy the neighbors are, the Estonian host population has a strong tendency to avoid living together with minorities, whereas minorities, highly segregated in the Soviet period, express readiness for spatial assimilation today.