Residential Sorting Research Articles

The implications of digital school quality information for neighbourhood and school segregation: Evidence from a natural experiment in Los Angeles

A digital information explosion has transformed cities’ residential and educational markets in ways that are still being uncovered. Although urban stratification scholars have increasingly scrutinised whether emerging digital platforms disrupt or reproduce longstanding segregation patterns, direct links between one theoretically important form of digital information – school quality data – and neighbourhood and school segregation are rarely drawn. To clarify these dynamics, we leverage an exogenous digital information shock, in which the Los Angeles Times’ website revealed measures of a particularly important school quality proxy – schools’ value-added effectiveness – for nearly all elementary schools in the Los Angeles Unified School District. Results suggest that although the information shock had no detectable effects on residential sorting or neighbourhood racial segregation, it did exert modest effects on school sorting – particularly for Latino and Asian students – albeit not in ways that materially diminished school racial segregation because the racial compositions of high- and low-value-added schools were broadly similar both before and after the information shock. We conclude that the urban stratification implications of digital information may be more nuanced than often appreciated, with effects operating through mechanisms beyond residential segregation and reflecting racial heterogeneity in constraints and preferences vis-à-vis specific types of information.

The Reign of Racialized Residential Sorting: Gentrification and Residential Mobility in the Twenty-First Century

Despite recent theoretical advances in explaining the persistence of segregation in the United States through structural sorting processes, how the spread and intensification of gentrification intersects with these processes is less clear. Drawing on the 2000–2017 waves of the Panel Study of Income Dynamics (PSID) and fixed effects logistic and linear regression models, we examine gentrification’s relationship with residential mobility patterns and whether this relationship is racially stratified. We do not find evidence that living in gentrifying neighborhoods is associated with higher rates of moving for lower-income respondents compared to those living in nongentrifying neighborhoods nor does this differ by race. However, we find starkly different locational outcomes between Black and White movers across the income spectrum, rather than the gentrification status of one’s neighborhood. We argue that processes of racial stratification in the housing market largely govern residential outcomes, regardless of gentrification.

The role of noncontiguous attendance zones in shaping school populations: A case study of Tucson, Arizona and Fort Bend, Texas

Noncontiguous school attendance zone boundaries (AZBs) have a unique, relatively uncommon shape that assign two or more non-adjacent residential areas to the same school. Given their ability to shape school enrollments by taking advantage of residential sorting, noncontiguous AZBs have historically been linked to explicit efforts to both segregate and desegregate schools. In this paper, we use a novel, longitudinal dataset of AZBs and descriptive quantitative and geospatial methods to understand how the relationship between noncontiguous zones, school diversity, and neighborhood demographics changed from 1990-2020 in two southwestern school districts—Tucson Unified School District, Arizona and Fort Bend Independent School District, Texas. Each district has a unique legal history and demographic context that informs their use of noncontiguous AZBs. We find noncontiguous AZBs are more strongly associated with racially diverse schools and are more likely to bring together neighborhoods with different compositions in Tucson compared to Fort Bend. However, the association between Tucson’s noncontiguous AZBs and racially diverse schools has waned since 1990, as the district has negotiated the end of its court-ordered desegregation plan. Our findings provide insight into when and how noncontiguous AZBs can effectively contribute to ethnoracially diverse schools.

Residential Sorting & Organizational Rigidity at The Eastman Kodak Company (1945-2005)

Residential Sorting & Organizational Rigidity at The Eastman Kodak Company (1945-2005)

Tiebout sorting in online communities

This paper proposes a stylized, dynamic model to address the issue of sorting online. There are two large homogeneous groups of individuals. Everyone must choose between two online platforms, one of which has superior amenities (akin to having superior local public goods). Each individual enjoys interacting online with those from their own group but dislikes being on the same platform as those in the other group. Unlike a Tiebout model of residential sorting, both platforms have unlimited capacity so there are no constraints on cross-platform migration. It is clear how each group would like to sort themselves but, in the presence of the other type, only the two segregated outcomes are guaranteed to be equilibria. Integration on a platform can be supported in equilibrium as long as the platform is sufficiently desirable. If online integration of the two communities is a desired social outcome, then the optimal policy is clear: make the preferred platform even more desirable. Revitalizing the inferior platform will never lead to integration and even increases the likelihood of segregation. Finally, integration is more elastic in response to an increase in platform amenities than to reductions in intolerance.

Urban heat and within-city residential sorting

This study presents new causal evidence on how urban heat contributes to sorting within a city. We estimate a discrete choice residential sorting model that includes census-tract fixed effects and controls for open space and green coverage to analyze how differences in urban heat at the census-tract level influence the location choices of New York City homeowners given their race, ethnicity, and income. Our results show clear patterns of residential sorting, with whites and high-income households outcompeting other racial/ethnic groups and low-income households for housing in cooler neighborhoods. Our counterfactual exercise, inspired by Cool Neighborhoods NYC, reveals that heat-mitigation policies can make poorer and minority households, on average, worse off. These findings are striking, considering that such programs often aim to enhance welfare in heat-exposed neighborhoods predominantly inhabited by low-income and minority households.

Unregulated contaminants in drinking water: Evidence from PFAS and housing prices

Our understanding of individuals’ response to information about unregulated contaminants is limited. We leverage the highly publicized social discovery of unregulated PFAS (per- and polyfluoroalkyl substances) contamination in public drinking water to study the impact of information about unregulated contaminants on housing prices. Using residential property transaction data, we employ a difference-in-differences research design and show that high profile media coverage about PFAS contamination significantly decreased property values of affected homes. We also find suggestive evidence of residential sorting that may have worsened environmental inequality.

Neighbourhood structure and environmental quality: A fine-grained analysis of spatial inequalities in urban Germany

Urban environments are characterised by sparsity of space, elevated levels of air pollution and limited exposure to natural environments. Yet, residential environmental quality varies substantially both between and within cities. This study combines information on the socio-economic and demographic composition of 243,607 urban neighbourhoods with administrative and remote sensing data on the spatial distribution of industrial plants and urban green space to investigate patterns of environmental inequality in urban Germany at unprecedented levels of spatial granularity. It disentangles neighbourhood disadvantages experienced by foreign minorities (non-nationals) from those experienced by low-income households in order to assess the plausibility of economic explanations of residential sorting. The high level of spatial granularity makes it possible to examine patterns of environmental inequality not only between the relatively large areas that have been used as units of analysis in previous work but also within them, while reducing the threat of ecological bias. Results indicate that non-nationals are more likely to be exposed to industrial air pollution and less likely to live close to green spaces. This association holds even after adjusting for neighbourhood income composition and in fixed-effects specifications that restrict the analysis to within-city variation. I find no evidence for environmental inequality by socio-economic status. Exploratory sub-sample analyses show that neighbourhood disadvantages for non-nationals are higher in cities characterised by high levels of anti-foreigner sentiment, pointing towards housing market discrimination as a potentially important driver of foreign residents’ neighbourhood disadvantage.

The Initial Residential Patterns of Immigrants across the Urban Hierarchy in Sweden: The Role of Educational Attainment

AbstractThis study employs the aspirations‐capabilities framework to explore the intricate interplay between choices and constraints shaping migrants' settlement patterns, with a particular emphasis on the often‐overlooked aspect of educational attainment. Using Swedish register data containing information about migrants' educational level, this paper examines and typifies the initial residential sorting patterns of migrants arriving in Sweden in the period 2000–2014. Employing multinomial logistic regression to understand how migrant sorting takes place, the results show a clear distinction in settlement patterns, with higher educated migrants being more likely to settle in metropolitan areas, and lower educated migrants ending up in rural areas, even when controlling for region of origin and purpose of migration. Nordic and African migrants, resettled refugees, older migrants, and migrant families with younger children are most likely to live in sparsely populated areas. The paper concludes that these trends exacerbate existing patterns of spatial polarization.

Residential sorting, local environments, and human capital

We consider the implications of unifying the distinct literatures on residential sorting and human capital dynamics. We argue that integrating insights from recent work in both areas has important implications for future research at the intersection of environmental and urban economics. To focus attention on these implications, we summarize stylized facts from recent empirical work on residential sorting and on the effects of exposures to environmental factors on human capital. Then we outline a simple overlapping generations model that reproduces these stylized facts and use it to guide our discussion on directions for future research.

Economic Benefits from Restoration Actions in Coastal Communities

In this study, we measure the effect of restoration actions on the economic value of coastal communities. We use a residential sorting model to simulate residential moves between communities and then estimate the value of restoring shoreline uses in coastal communities. Our application measures the effect of cleaning up Great Lakes Areas of Concern (AOC) — which are heavily polluted coastal locations prioritized for restoration in the United States and Canada — on the willingness to pay (WTP) of residents in the U.S. state of Michigan. While prior research documents the effect of individual AOCs on residents, particularly in local housing markets, little research has examined systematically where restoration is occurring and whether it affects mobility at a regional level. The results in this paper suggest that restoration actions can affect mobility, with point estimates indicating households are willing to pay $54/year for the uses restored between 2005 and 2015 in Michigan’s AOCs.

The effects of air quality on housing prices: Evidence from the Aliso Canyon gas leak

Causal studies on the effect of air quality on house prices, specifically focusing on a large metropolitan area, are rare and difficult to obtain because of potential endogeneity from residential sorting. In this study, we use the Aliso Canyon gas leak as a natural experiment to examine the effect of air quality on housing prices of Los Angeles City. Using a spatial difference-in-differences model, we estimate that houses within the 5-mile radius of the gas well experienced a 8.6% discount in price during the leak, and an additional 13.1% discount after the well was sealed and the air quality was restored. The decrease in price lasted beyond 18 months, with houses closer to the leak suffering higher discounts. We conclude that air quality degradation has a direct and longer term negative impact on house prices.

Towards an equity-centred model of sustainable mobility: Integrating inequality and segregation challenges in the green mobility transition

Urban planners and transportation policy makers around the world are proposing initiatives for greener mobility, particularly by promoting higher urban development densities, active transport modes, and non-auto access to destinations. This Special Issue engages critically with the sustainable mobility and 15-Minute City concepts by outlining an Equitable Sustainable Mobility Model that integrates non-auto accessibility improvements with key daily activity destinations to establish a wider discussion on urban structure, segregation, equity and mobility. The papers collected in this Special Issue reveal that sustainable mobility solutions are only partial when detached from the underlying mechanisms of residential sorting and spatial patterns of daily activity spaces. An equitable shift towards greener mobility needs to (1) address rising levels of residential segregation by promoting neighbourhood-level mixed-income housing, (2) radically shift urban space from automobility to different greener forms of mobility, (3) address not only neighbourhood specific, but also metropolitan-level access challenges to key activity places, (4) focus on integrating broadly accessible and affordable travel modes, particularly active travel (walking and cycling) and public transit, and (5) develop e-mobility solutions that are accessible to diverse user needs and offer flexible inter-neighbourhood coverage.

Data Access and the Study of Educational Equity: Implications from a National School Boundary Data Collection Effort

Abstract School attendance zone boundary (AZB) data remain relatively underdocumented and understudied within the field of education, despite their critical implications for educational (in)equity. AZBs shape student outcomes and residential sorting patterns both by determining the public schools a student is assigned to and by signaling neighborhood characteristics to prospective homebuyers. The limited access, regulation, and review of AZB data to date has left a gap in the knowledge base, having the potential to leave intact (and exacerbate) patterns of segregation that maintain inequities in educational opportunity. Lack of data also limits our ability to know whether and when AZBs may mitigate segregation. In this brief, we examine a novel data collection effort of current and historical AZB data—the Longitudinal School Attendance Boundary System—to explore the contextual and political factors associated with data access and data quality. We aim to show how factors that hinder access to quality AZB data affect the study of educational equity, and we advocate for more comprehensive, top–down governmental efforts to create, maintain, and collect these data.

School Attendance Boundaries and the Segregation of Public Schools in the United States

School segregation is determined both by residential sorting and local policies, such as the drawing of attendance boundaries and school siting. This paper develops an approach to understanding the relative importance of these factors by calculating the distance-minimizing assignment of students to schools and assessing whether actual assignments differ systematically by race. Using census data and attendance boundary maps for nearly 1,600 school districts, I find that attendance boundaries create 5 percent more integration than a distance-minimizing baseline, while school siting plays almost no role. Residential segregation alone explains more than 100 percent of school segregation in the United States. (JEL H75, I21, I28, J15, R23)

The Damages and Distortions from Discrimination in the Rental Housing Market

Abstract By constraining an individual’s choice during a search, housing discrimination distorts sorting decisions away from true preferences and results in a ceteris paribus reduction in welfare. This study combines a large-scale field experiment with a residential sorting model to derive utility-theoretic measures of renter welfare loss associated with the constraints imposed by discrimination in the rental housing market. Results from experiments conducted in five cities show that key neighborhood amenities are associated with higher levels of discrimination. Counterfactual simulations based on the sorting model suggest that discrimination imposes damages equivalent to 4.4% and 3.5% of the annual incomes for African American and Hispanic/Latinx renters, respectively. Damages are increasing in income for African American renters, such that effects become stronger for economically mobile households. Renters of color must make substantial investments in additional search to mitigate the costs of these constraints. We find that a naive model ignoring discrimination constraints yields biased estimates of willingness to pay for key neighborhood amenities.

Pay for elite private schools or pay for higher housing prices? Evidence from an exogenous policy shock

This study provides the first direct empirical evidence on whether private school lottery enrollment program affects school district house prices and residential sorting behaviors. Although the new lottery enrollment policy for private schools in China aims to promote equal and affordable education, it also introduces uncertainty. We assessed the policy impact using the panel data of residential housing transactions from the largest real estate agent in Chengdu during 2018–2020 and controlling for grid-level demographic and economic variables from mobile Internet data. We found that the lottery-based private school enrollment uncertainty leads to a substantial rise in the value of the key and elite school district house (SDH) prices. The house price premiums of the key SDH and elite SDH increased by 2.8% and 7.8% in the post-policy period, respectively. We also observed a significant intensification of residential sorting behavior within the elite public school districts afterwards. These results suggest that parents pay higher house prices when access to quality private schools becomes uncertain.

How buses alleviate unemployment and poverty: Lessons from a natural experiment in Clayton County, GA

Many studies have documented the linkage between public transportation and economic outcomes, though there is relatively little empirical evidence on the consequences of losing existing transit services, especially bus services, which disproportionately serve low-income populations. We investigate the impacts of bus access on poverty and employment using a natural experiment in Clayton County, GA, where the local bus transit was terminated between 2010 and 2015. Using a difference-in-difference approach, we find substantial increases in poverty and unemployment rates in affected neighbourhoods during the five-year period. Our findings suggest both the spatial mismatch hypothesis, which predicts the reduction in transit access can lead to reductions in job accessibility and employment, and the residential sorting hypothesis, which states that poor households gravitate towards neighbourhoods with better transit access, could be at play. Overall, we find strong evidence that disruptions in bus transit could have significant adverse impacts on neighbourhood economic outcomes. Our findings underscore the need for federal and local public transportation funding to help improve job access, alleviate poverty, and maintain neighbourhood stability.

A Tale of Two Cities: Mainland Chinese Buyers in the Hong Kong Housing Market

Abstract This article examines the impact of mainland Chinese buyers in the Hong Kong housing market, using complete transaction records between 2001 and 2017. We find that mainland buyers pay an average price premium of 1.4% compared with locals. The premiums are estimated to be 3.5% for large-sized luxury units and 1.6% for homes in central locations. The mechanisms that underlie the price premiums include a hedging effect, residential sorting, and information barriers, of which the hedging motive has the strongest impact. Mainland buyers’ price premiums rise significantly when the Chinese currency depreciates or China Economic Policy Uncertainty increases. Our study sheds light on the impact and mechanism of the ““China shock” on the global housing markets.

Residential Segregation and Women’s Labor Market Participation: The Case of Santiago De Chile

Women’s labor market participation in Chile ranks among the lowest in Latin America. In a country where over 90 percent of the population lives in segregated cities, where employment opportunities cluster in affluent neighborhoods, residential sorting has surprisingly been neglected as an explanatory factor. This article addresses this omission by calculating the effects of residential segregation on labor market participation among less-educated caregivers. Using an OLS fixed effects model, the study finds that segregation entails adverse spatial mismatch effects on labor market participation. No other sub-population is affected in this manner. Hence, residential segregation contributes to the consolidation of three types of inequalities. First, it reproduces gendered inequalities within less-educated households. Second, in the context of increasing labor market participation among more-educated women, residential segregation further increases inequalities between low-income and affluent households. Finally, it deepens geographical inequalities between marginalized and non-marginalized households. HIGHLIGHTS Residential segregation has excluded less-educated caregiving women from paid work. Less-educated communities reside in regions with low job density. A spatial mismatch is a gendered phenomenon insofar as mobility is gendered. Segregation does not affect men’s or more-educated women’s labor force participation. Segregation aggravates economic, geographic, and gender inequalities.