The Impact of Residential Mobility on Measurements of Neighbourhood Effects

Abstract

Neighbourhoods and cities are dynamic; their characteristics and relative positions change over time due to constant moves in and out. However, neighbourhood effect theory and most attempts to quantitatively estimate neighbourhood effects seem to treat neighbourhoods as if they were static. This paper argues that such a view is not only strange but may also result in biased estimates. Four methodological challenges are highlighted that are directly related to mobility: (1) measures of exposure time; (2) neighbourhood change; (3) selection bias; and (4) endogeneity. These are all topics worthy of scholarly interest in themselves, but also challenges that all neighbourhood effect studies must address to convincingly argue that their results are indicative of causal relationships—results of neighbourhood transmission mechanisms—and not just statistical correlations. The paper discusses how and to what extent these challenges have been met by the quantitative neighbourhood effect literature and gives directions to future research.