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Neighbourhoods, Households and Income Dynamics: A Semi-Parametric Investigation of Neighbourhood Effects

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  • Bolster, Anne
  • Burgess, Simon
  • Johnston, Ron
  • Jones, Kelvyn
  • Propper, Carol
  • Sarker, Rebecca

Abstract

Using a unique dataset, we present evidence on income trajectories of people living in micro neighbourhoods. We place bounds on the influence of neighbourhood making as few parametric assumptions as possible. The Paper offers a number of advances. We exploit a dataset that is large, representative, longitudinal with very local neighbourhoods. We analyse income growth over one, five- and ten-year windows. We analyse the whole distribution of income growth and track large gainers and losers as well as average outcomes. We consider the appropriate definition of neighbourhood. We find little evidence of a negative relationship between neighbourhood and subsequent income growth.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 4611.

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Date of creation: Sep 2004
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Handle: RePEc:cpr:ceprdp:4611

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Keywords: income dynamics; neighbourhood effects; small scale neighbourhoods;

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  1. Manski, C.F., 1991. "Identification of Endogenous Social Effects: the Reflection Problem," Working papers 9127, Wisconsin Madison - Social Systems.
  2. Charles F. Manski, 2000. "Economic Analysis of Social Interactions," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 115-136, Summer.
  3. Lawrence Katz & B. Jeffrey Liebman, 2000. "Moving to Opportunity in Boston: Early Results of a Randomized Mobility Experiment," Working Papers 820, Princeton University, Department of Economics, Industrial Relations Section..
  4. Brock, William A. & Durlauf, Steven N., 2001. "Interactions-based models," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 5, chapter 54, pages 3297-3380 Elsevier.
  5. Cutler, David M & Glaeser, Edward L, 1997. "Are Ghettos Good or Bad?," The Quarterly Journal of Economics, MIT Press, vol. 112(3), pages 827-72, August.
  6. Jens Ludwig & Greg J. Duncan & Paul Hirschfield, 2001. "Urban Poverty And Juvenile Crime: Evidence From A Randomized Housing-Mobility Experiment," The Quarterly Journal of Economics, MIT Press, vol. 116(2), pages 655-679, May.
  7. Brock,W.A. & Durlauf,S.N., 2003. "Multinomial choice with social interactions," Working papers 1, Wisconsin Madison - Social Systems.
  8. Andrew McCulloch, 2001. "Ward-level deprivation and individual social and economic outcomes in the British Household Panel Study," Environment and Planning A, Pion Ltd, London, vol. 33(4), pages 667-684, April.
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