Neighborhood Choice Research Articles

How neighbourhood effects vary by achievement level

Abstract After long-standing calls for research into ‘for whom’ neighbourhood matters, the literature has recently gained traction, focussing on background characteristics such as gender, race, and socioeconomic background. However, there is still scarce and only indirect evidence on whether neighbourhood effects vary by children’s academic ability. In this paper, we combine the Neighbourhood Choice Model with quantile regressions to investigate whether neighbourhood effects vary by children’s academic proneness. Using Norwegian register data, we demonstrate heterogeneity in the effects of neighbourhood deprivation as a function of students’ proneness to academic achievement. Students with the very lowest and highest academic potential are the least affected by neighbourhood disadvantage, while those with below average—but not at the lowest end—are most strongly affected. Moreover, while girls are less affected than boys, and children from less educated and affluent families are more affected by neighbourhood disadvantage than their more privileged peers, the effects of these observed moderators are considerably smaller than the heterogeneity observed as a function of academic proneness. Overall, our use of quantile regressions opens up new venues for understanding ‘for whom’ neighbourhoods matter, with individual-level academic vulnerability and strengths being an influential source of neighbourhood effects variation.

Middle‐Class Versus Working‐Class White Mothers’ Approaches to Diversity in the Netherlands

There is a large body of literature on how white middle‐class parents select schools for their children in gentrifying urban contexts. In this study, we aimed to explore the experiences of such parents after enrolling their children in ethnically mixed schools but also how these experiences varied in gentrifying urban contexts and smaller cities. We interviewed mothers without a migration background living in a large city (Amsterdam) or a medium‐sized city (Tilburg) who had chosen to send their children to an ethnically mixed school in a majority–minority neighbourhood, asking them to reflect on their neighbourhood choice, school choice, and subsequent experiences. Based on our analysis, we developed a typology of parents’ positions towards diversity, whereby they could be described as idealists, pragmatists, and realists. Aligned with previous studies, this article shows that the idealist position on diversity was more common among the white middle classes in Amsterdam, who expressed a positive attitude towards diversity but engaged with it to a controlled and limited extent. However, we also identified a group of mothers, mostly working class but also middle class, who did not take an idealized approach to diversity but embraced it as a lived reality. The study underlines the importance of mothers’ engagement with diversity during their own childhood and youth as an important factor in shaping parenting behaviour around diversity.

Can Fair Share Policies Expand Neighborhood Choice? Evidence From Bypassing Exclusionary Zoning Under Massachusetts Chapter 40B

Opening up neighborhoods that offer greater opportunities for social mobility to low- and moderate-income households remains a challenge in the United States. Exclusionary zoning practices act as a barrier to current efforts by restricting the supply of affordable housing. In this paper, we examine whether fair share policies that seek to bypass these restrictive zoning practices offer one potential solution. Focusing on Massachusetts Chapter 40B, we find clear evidence that such policies build affordable housing in neighborhoods with strikingly greater opportunities for social mobility than are otherwise available to low- and moderate-income households. Leveraging novel data on 40B development addresses linked to a wide range of public and administrative records, we find that 40B produces affordable units in neighborhoods with greater economic mobility, higher performing schools, greater social capital, less pollution, better health outcomes, and lower incarceration rates than both the typical neighborhood in Massachusetts and those available to beneficiaries of the state’s Low-Income Housing Tax Credit, Housing Choice Voucher, and public housing programs. Consistent with previous research on policies that have segregated affordable housing and opportunity, we also find that neighborhoods with affordable 40B units are whiter and more affluent than average. An examination of underlying policy mechanisms suggests that 40B’s ability to bypass exclusionary zoning plays a central role in explaining differences in neighborhood characteristics between 40B and other programs. We further find little evidence to support concerns that 40B’s zoning override leads to affordable 40B units being built in the least advantaged areas of municipalities, in polluted zones, or near highways, though a non-trivial share of units are located in industrial zones. These results suggest that policies like 40B may be valuable complements to other major housing programs in the United States.

Creating Moves to Opportunity: Experimental Evidence on Barriers to Neighborhood Choice

Low-income families often live in low-upward-mobility neighborhoods. We study why by using a randomized trial with housing voucher recipients that provided information, financial support, and customized search assistance to move to high-opportunity neighborhoods. The treatment increased the fraction moving to high-upward-mobility areas from 15 to 53 percent. A second trial reveals this treatment effect is driven primarily by customized search assistance. Qualitative interviews show that the intervention relaxed bandwidth constraints and addressed family-specific needs. Our findings imply many low-income families do not have strong preferences to stay in low-opportunity areas and that barriers in housing search significantly increase residential segregation by income. (JEL D83, G51, R21, R23, R31, R38)

How neighborhoods came to matter more over time: A broad historical sketch

ABSTRACT The demise of neighbourhood-scale community has been lamented for decades. Tight-knit neighboring has indeed declined. However, its significance is colored by nostalgia. In cities and suburbs, the loosening of neighborhoods has encouraged residents and agents to create imaginary local communities, partly by fashioning local traditions. In changed form, community persists. Underlying it, for those able to choose, are individualistic calculations. With increasing homeownership more people have a financial stake in place, the investment aspects becoming prominent since the 1980s. Because most children attend local schools, the growing importance of education has made them a major factor in neighborhood choice, with financial implications. In counterpoint, lower-income households with little choice are constrained to neighborhoods where the disadvantages of crime, poor mobility, and indifferent schools are exacerbated by growing wealth inequality. The concept and reality of neighborhoods have never been more important, in urban studies and in urban life.

Does Poor Health Influence Residential Selection? Understanding Mobility Among Low-Income Housing Voucher Recipients in the Moving to Opportunity Study

Housing-mobility programs and housing choice vouchers provide low-income families with a potentially transformative opportunity to move to low-poverty neighborhoods. However, families often face barriers to attaining upward residential mobility; poor health may be one important barrier, although few studies have examined this hypothesis. We used the experimental Moving to Opportunity for Fair Housing Demonstration Project (MTO) Study, constructed residential trajectories, and linked neighborhood opportunity measures to over 14,000 addresses of 3526 families across 7 years. We used latent growth curve longitudinal models to test how baseline health modified effects of MTO housing voucher treatment on neighborhood opportunity trajectories. Results show that poor baseline health adversely influenced how the voucher induced upward mobility. Voucher receipt strongly promoted residential mobility if families were healthy; moreover, the low-poverty neighborhood voucher plus counseling treatment promoted higher-opportunity neighborhood attainment than controls, regardless of the baseline health of the family. However, families with health vulnerabilities did not retain the same initial neighborhood gains conferred by the housing choice voucher (HCV) treatment as families without health vulnerabilities. These results suggest that housing counseling may be one necessary element to expand neighborhood choice into higher-opportunity neighborhoods for families with health challenges. Providing housing vouchers alone is insufficient to promote low-income-family high-opportunity moves, for families who have disabilities or special needs. The implications of these results point to scaling up housing-mobility programs, to provide tailored support for low-income families to use HCVs to make high-opportunity moves, which is particularly necessary for families with health challenges.

How Americans Respond to Idiosyncratic and Exogenous Changes in Household Wealth and Unearned Income

Abstract We study how Americans respond to idiosyncratic and exogenous changes in household wealth and unearned income. Our analyses combine administrative data on U.S. lottery winners with an event study design. We first examine individual and household earnings responses to these windfall gains, finding significant and sizable wealth and income effects. On average, an extra ${\$}$1 of unearned income in a given period reduces household labor earnings by about 50 cents, decreases total labor taxes by 10 cents, and increases consumption expenditure by 60 cents. These effects are heterogeneous across the income distribution, with households in higher quartiles of the income distribution reducing their earnings by a larger amount. Next we examine margins of adjustment other than earnings and, in the course of doing so, address a number of important economic questions about how additional wealth or unearned income affect retirement decisions and labor market dynamics, family formation and dissolution, entrepreneurship and self-employment, and geographic mobility and neighborhood choice. Last, we carefully compare our findings to those reported in existing lottery studies. This comparison reveals that existing U.S. studies substantially underestimate wealth and income effects because they use measures that understate the earnings responses and overstate the after-tax wealth changes associated with lottery wins.

The Urban Tapestry: Unraveling Cultural Threads in Real Estate Choices in Gurgaon, Haryana, India - A Literature Review

In the intricate weave of urban development, the tapestry of culture plays an instrumental role in influencing real estate buying behaviors. This review paper delves into the complex relationship between cultural factors and real estate choices in the burgeoning city of Gurgaon, Haryana, India. Drawing upon an extensive examination of literature, surveys, and empirical studies, this paper seeks to shed light on how deep-seated cultural values, beliefs, and traditions influence the preferences and decisions of consumers in the Gurgaon real estate market. From the significance of Vastu Shastra in architectural designs to the socio-cultural implications of neighborhood choices, this study underscores the undeniable impact of cultural threads on the city's real estate tapestry. As Gurgaon emerges as a global metropolis, understanding these cultural nuances not only enhances our comprehension of its residents' preferences but also provides insights for developers, policymakers, and urban planners to weave a cityscape that resonates with its people's cultural fabric.

Maximizing Utility or Avoiding Losses? Uncovering Decision Rule-Heterogeneity in Sociological Research with an Application to Neighbourhood Choice

Empirical studies on individual behaviour often, implicitly or explicitly, assume a single type of decision rule. Other studies do not specify behavioural assumptions at all. We advance sociological research by introducing (random) regret minimization, which is related to loss aversion, into the sociological literature and by testing it against (random) utility maximization, which is the most prominent decision rule in sociological research on individual behaviour. With an application to neighbourhood choice, in a sample of four European cities, we combine stated choice experiment data and discrete choice modelling techniques and find a considerable degree of decision rule-heterogeneity, with a strong prevalence of regret minimization and hence loss aversion. We also provide indicative evidence that decision rules can affect expected neighbourhood demand at the macro level. Our approach allows identifying heterogeneity in decision rules, that is, the degree of regret/loss aversion, at the level of choice attributes such as the share of foreigners when comparing neighbourhoods, and can improve sociological practice related to linking theories and social research on decision-making.

Neuronal contact predicts connectivity in the C. elegans brain

Axons must project to particular brain regions, contact adjacent neurons, and choose appropriate synaptic targets to form a nervous system. Multiple mechanisms have been proposed to explain synaptic partnership choice. In a "lock-and-key" mechanism, first proposed by Sperry's chemoaffinity model,1 a neuron selectively chooses a synaptic partner among several different, adjacent target cells, based on a specific molecular recognition code.2 Alternatively, Peters' rule posits that neurons indiscriminately form connections with other neuron types in their proximity; hence, neighborhood choice, determined by initial neuronal process outgrowth and position, is the main predictor of connectivity.3,4 However, whether Peters' rule plays an important role in synaptic wiring remains unresolved.5 To assess the nanoscale relationship between neuronal adjacency and connectivity, we evaluate the expansive set of C.elegans connectomes. We findthat synaptic specificity can be accurately modeled as a process mediated by a neurite adjacency threshold and brain strata, offering strong support for Peters' rule as an organizational principle of C.elegans brain wiring.

Examining neighborhood effects on mental health utilizing a novel two-stage modeling approach

Neighourhood conditions may affect health, but health may also determine a preference where to live. This study estimates the effect of neighbourhood characteristics on mental health while aiming to adjust for this residential self-selection. A two-step method was implemented using register data from Statistics Netherlands from all residents of the city of Rotterdam relocating within the city in 2013 (N=12.456). First, using a conditional logit model, we estimated for each individual the probability of relocating to a neighbourhood over all other neighbourhoods in Rotterdam, based on personal and neighbourhood characteristics in 2013. Second, we corrected for this selection process in a model investigating the effects of neighbourhood characteristics in 2014 on reimbursed anti-depressant/anti-psychotic medication in 2016. Personal and neighbourhood characteristics predicted neighbourhood choice, indicating strong patterns of selection into neighbourhoods. Unadjusted for selection log neighbourhood income was associated with reimbursed medication (β=─0.040,95%CI:─0.060,─0.020), but the association strongly attenuated after controlling for self-selection into neighbourhoods (β=─0.010,95%CI:─0.030,0.011). The opposite was observed for contact with neighbors; unadjusted for self-selection there was no association (β=─0.020, 95%CI:─0.073,0.033), but after adjustment increased neighborhood contact was associated with an 8.5% relative reduction in reimbursed medication (β=-0.075,95%CI:=─0.126,─0.025). The method illustrated in this study offers new opportunities to disentangle selection from causation in neighbourhood health research.

The Choice of Neighbourhood Environments among the Local Community Setting in Ondo State, Nigeria

Human social and community satisfaction has become vital among the local residents. This study examines the factor of neighbourhood choice and preference in a local community in the Ondo State, Nigeria. The study implored local residents’ perception via 150 structured questionnaires. The findings showed that local residents’ choice of environment hinged on the factor of safety, socio-economic and resident’s culture. Thus, the choice of the local community might not be the same with the urban residents.

Public Education Inequality and Intergenerational Mobility

Public school funding depends heavily on local property tax revenue. Consequently, low-income households have limited access to quality education in neighborhoods with high house prices. In a dynamic life-cycle model with neighborhood choice and endogenous local school quality, we show that this property tax funding mechanism reduces intergenerational mobility and accounts for the spatial correlation between house prices and mobility. A housing voucher experiment improves access to schools, with benefits that can last for multiple generations. Additionally, a policy that redistributes property tax revenues equally across schools improves mobility and welfare. However, the benefits can take generations to be realized. (JEL H71, H75, I21, I22, J62, R23, R31)

Sorting or Steering: The Effects of Housing Discrimination on Neighborhood Choice

Growing evidence indicates that neighborhoods affect human capital accumulation, raising concern that the exclusionary effects of housing discrimination could contribute to persistent inequality in the United States. Using data from HUD’s most recent Housing Discrimination Study and microlevel data on neighborhood attributes in 28 US cities, we find that minorities are steered toward neighborhoods with less economic opportunity and greater exposures to crime and pollution. Holding preferences and income constant, discriminatory steering alone can explain a disproportionate number of minority households found in high-poverty neighborhoods in the United States and the higher exposure of African American mothers to toxic pollutants.

Modelling Neighbourhood Effects in Three Dutch Cities Controlling for Selection

The non-random selection of people into neighbourhoods complicates the estimation of causal neighbourhood effects on individual outcomes. Measured neighbourhood effects could be the result of characteristics of the neighbourhood context, but they could also result from people selecting into neighbourhoods based on their preferences, income, and the availability of alternative housing. This paper examines how the neighbourhood effect on individual income is altered when geographic selection correction terms are added as controls, and how these results vary across three Dutch urban regions. We use a two-step approach in which we first model neighbourhood selection, and then include neighbourhood choice correction components in a model estimating neighbourhood effects on individual income. Using longitudinal register datasets for three major Dutch cities: Amsterdam, Utrecht and Rotterdam, and multilevel models, we analysed the effects for individuals who moved during a 5-year period. We show that in all cities, the effect of average neighbourhood income on individual income becomes much smaller after controlling for explicitly modelled neighbourhood selection. This suggests that studies that do not control for neighbourhood selection most likely overestimate the size of neighbourhood effects. For all models, the effects of neighbourhood income are strongest in Rotterdam, followed by Amsterdam and Utrecht.

To move or not to move? Immigration and natives’ neighborhood choices in Seoul, Korea

Abstract We investigate the impact of an increase in immigrant inflows on natives’ residential choices in a large metropolitan city. We utilize an administrative dataset containing information about residential address changes and self-reported reasons for relocation. Exploiting the expansion of a special visa program as an exogenous shock, we find that immigration inflows are both a push and a pull factor for natives. While neighborhoods in Seoul lost more than 6 natives for every 10 additional immigrants between 2006 and 2015, certain native workers were drawn to areas with immigrant inflows for job-related reasons.

Free neighborhood choice boosts socially optimal outcomes in stag-hunt coordination problem

Situations where independent agents need to align their activities to achieve individually and socially beneficial outcomes are abundant, reaching from everyday situations like fixing a time for a meeting to global problems like climate change agreements. Often such situations can be described as stag-hunt games, where coordinating on the socially efficient outcome is individually optimal but also entails a risk of losing out. Previous work has shown that in fixed interaction neighborhoods agents’ behavior mostly converges to the collectively inefficient outcome. However, in the field, interaction neighborhoods often can be self-determined. Theoretical work investigating such circumstances is ambiguous in whether the efficient or inefficient outcome will prevail. We performed an experiment with human subjects exploring how free neighborhood choice affects coordination. In a fixed interaction treatment, a vast majority of subjects quickly coordinates on the inefficient outcome. In a treatment with neighborhood choice, the outcome is dramatically different: behavior quickly converges to the socially desirable outcome leading to welfare gains 2.5 times higher than in the environment without neighborhood choice. Participants playing efficiently exclude those playing inefficiently who in response change their behavior and are subsequently included again. Importantly, this mechanism is effective despite that only few exclusions actually occur.

The local labour market effects of light rail transit

Many US cities have made large investments in light rail transit in order to improve commuting networks. I analyse the labour market effects of light rail in four US metros. I propose a new instrumental variable to overcome endogeneity in transit station location, enabling causal identification of neighbourhood effects. Light rail stations are found to drastically improve employment outcomes in the surrounding neighbourhood. To incorporate endogenous sorting by workers, I estimate a structural neighbourhood choice model. Light rail systems tend to raise rents in accessible locations, displacing lower skilled workers to isolated neighbourhoods, which reduces aggregate metropolitan employment in equilibrium.

Rental prices in Germany: A comparison between migrants and natives

AbstractThis paper deals with the question of whether migrants pay a rent premium for apartments of comparable quality and neighborhood characteristics. We use a two‐step selection‐correction model augmented by a control function to account for nonrandom neighborhood choice. The estimation sample is a uniquely assembled panel comprising the Socio‐Economic Panel (SOEP), information on household and apartment characteristics, as well as georeferenced data describing neighborhood quality. Our estimates reveal that people with migration backgrounds are not penalized in the German local rental market in terms of higher rental payments.

Free Neighborhood Choice Boosts Socially Optimal Outcomes in Stag-Hunt Coordination Problem

Situations where independent agents need to align their activities to achieve individually and socially beneficial outcomes are abundant, reaching from everyday situations like fixing a time for a meeting to global problems like climate change agreements. Often such situations can be described as stag-hunt games, where coordinating on the socially efficient outcome is individually optimal but also entails a risk of losing out. Previous work has shown that in fixed interaction neighborhoods agents' behavior mostly converges to collectively inefficient outcome. However, in the field, interaction neighborhoods often can be self-determined. Theoretical work investigating such circumstances is ambiguous in whether the efficient or inefficient outcome will prevail. We performed an experiment with human subjects exploring how free neighborhood choice affects coordination. In a fixed interaction treatment, a vast majority of subjects quickly coordinates on the inefficient outcome. In a treatment with neighborhood choice, the outcome is dramatically different: behavior quickly converges to the socially desirable outcome leading to welfare gains 2.5 times higher than in the environment without neighborhood choice. Participants playing efficiently exclude those playing inefficiently who in response change their behavior and are subsequently included again. Importantly, this mechanism is effective despite that only few exclusions actually occur.