Is social polarization related to urban density? Evidence from the Italian housing market

The aim of this work is to assess variations in housing market polarization in Italian cities since 2008, during the years of economic recession in Italy. An index of market polarization was constructed and correlated with urban density and socio-economic factors, as proxies for urban development of the Southern Euro countries. The hypothesis is that social polarization has increased since 2008, when an economic and sovereign debt crisis began, and is negatively correlated with housing market trends in more densely populated cities than in sprawl territories. Multivariate regression on housing price variations since 2008, with a dataset of economic variables concerning 112 Italian provincial capitals, was used to verify the hypothesis, and analysis confirmed that housing market polarization had increased since 2008 and shows significant statistical correlations with urban density, socio-economic characteristics, and housing affordability. Empirical evidence also demonstrates the close relationship among price trends, urban density, and the socio-economic structure of urban populations.