Assessing the Evidence on Neighborhood Effects from Moving to Opportunity

Abstract

The interpretation of estimates from Moving to Opportunity (MTO) as neighborhood effects has created significant controversy among social scientists. This paper presents a framework that clarifies the interpretation of results from the MTO housing mobility experiment. The paper defi nes several neighborhood treatments and estimates their Local Average Treatment Effects (LATEs) using assigned treatment in MTO as an instrumental variable. This framework clarifies that while parameters estimated in the literature do not suffer from selection bias, selection into treatment is an inescapable issue if one seeks to learn about neighborhood effects from MTO. The LATE parameters estimated in this paper are neighborhood effects for the subgroup of MTO families who are compliers with respect to the defined treatment. In contrast, the Treatment-on-the-Treated (TOT) parameters reported in the literature are program effects.