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Old homes, externalities, and poor neighborhoods. A model of urban decline and renewal

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  • Rosenthal, Stuart S.

Abstract

This paper investigates urban decline and renewal in the United States using three panels that follow neighborhoods on a geographically consistent basis over extended periods of time. Findings indicate that change in neighborhood economic status is common, averaging roughly 13 percent per decade; roughly two-thirds of neighborhoods studied in 1950 were of quite different economic status fifty years later. Panel unit root tests for 35 MSAs indicate that neighborhood economic status is a stationary process, consistent with long-running cycles of decline and renewal. In Philadelphia County, a complete cycle appears to last up to 100 years. Aging housing stocks and redevelopment contribute to these patterns, as do local externalities associated with social interactions. Lower-income neighborhoods appear to be especially sensitive to the presence of individuals that provide social capital. Many of the factors that drive change at the local level have large and policy relevant effects.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Urban Economics.

Volume (Year): 63 (2008)
Issue (Month): 3 (May)
Pages: 816-840

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Handle: RePEc:eee:juecon:v:63:y:2008:i:3:p:816-840

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Web page: http://www.elsevier.com/locate/inca/622905

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Keywords: Filtering Externalities Neighborhoods Poverty;

References

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Citations

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Cited by:
  1. McKinnish, Terra & Walsh, Randall & White, T. Kirk, 2007. "Who Gentrifies Low-income Neighborhoods?," MPRA Paper 6671, University Library of Munich, Germany, revised Nov 2007.
  2. Stephen L. Ross, 2009. "Social Interactions within Cities: Neighborhood Environments and Peer Relationships," Working papers 2009-31, University of Connecticut, Department of Economics.
  3. Saiz, Albert & Wachter, Susan M., 2006. "Immigration and the Neighborhood," IZA Discussion Papers 2503, Institute for the Study of Labor (IZA).
  4. Krupka, Douglas J., 2008. "The Stability of Mixed Income Neighborhoods in America," IZA Discussion Papers 3370, Institute for the Study of Labor (IZA).
  5. Clapp, John M. & Bardos, Katsiaryna Salavei & Wong, S.K., 2012. "Empirical estimation of the option premium for residential redevelopment," Regional Science and Urban Economics, Elsevier, vol. 42(1-2), pages 240-256.
  6. Vigdor, Jacob L., 2010. "Is urban decay bad? Is urban revitalization bad too?," Journal of Urban Economics, Elsevier, vol. 68(3), pages 277-289, November.
  7. Ooi, Joseph T.L. & Le, Thao T.T., 2013. "The spillover effects of infill developments on local housing prices," Regional Science and Urban Economics, Elsevier, vol. 43(6), pages 850-861.
  8. Boustan, Leah P. & Margo, Robert A., 2013. "A silver lining to white flight? White suburbanization and African–American homeownership, 1940–1980," Journal of Urban Economics, Elsevier, vol. 78(C), pages 71-80.
  9. Ellen, Ingrid Gould & O'Regan, Katherine M., 2011. "How low income neighborhoods change: Entry, exit, and enhancement," Regional Science and Urban Economics, Elsevier, vol. 41(2), pages 89-97, March.
  10. Eriksen, Michael D., 2009. "The market price of Low-Income Housing Tax Credits," Journal of Urban Economics, Elsevier, vol. 66(2), pages 141-149, September.
  11. Krupka, Douglas J. & Noonan, Douglas S., 2009. "Neighborhood Dynamics and the Housing Price Effects of Spatially Targeted Economic Development Policy," IZA Discussion Papers 4308, Institute for the Study of Labor (IZA).
  12. Jones, David J., 2012. "Primary prevention and health outcomes: Treatment of residential lead-based paint hazards and the prevalence of childhood lead poisoning," Journal of Urban Economics, Elsevier, vol. 71(1), pages 151-164.

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