Despite a large body of research on neighbourhood effects, there are no clear conclusions how much, if any, independent effect the neighbourhood has on its residents. This is largely due to selection effects. It is therefore crucial to gain more insight in selective residential mobility and neighbourhood choice. A better understanding of selectivity will help to address and reduce selection bias. This thesis provides these insights. It shows ethnic, income and household differences in residential mobility preferences and behaviour and explains why different people move to different neighbourhoods. Segregation is found to be partly voluntary, caused by group differences in preferences, and partly involuntary, caused by group differences in constraints induced by housing market characteristics or discrimination. Additionally, it studies neighbourhood effects of ethnic minority concentration. Bringing together the literatures on residential mobility and neighbourhood effects, this thesis contributes to the knowledge on selectivity and selection bias necessary to advance neighbourhood effects research.