This paper applied the model of Linear System of Action developed by C
oleman (1992) to understand racial composition in neighborhoods from a
systemic approach. The model had an advantage to consider how an indi
vidual household simultaneously maximizes all desirable neighborhood q
ualities with limited socioeconomic resources. The model generated rel
ative values of socioeconomic resources and neighborhood qualities of
each racial group in the exchange process. In addition, the model esti
mated a preference hierarchy of neighborhood qualities of each group.
Results suggested that blacks and Asians in Canada tend to live in nei
ghborhoods with higher proportions of their own groups because blacks
may be steered away from predominantly white neighborhoods and Asians
experience low returns on their socioeconomic resources in improving s
patial contact with whites. (C) 1997 Academic Press.