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Happy in the Hood? The Impact of Residential Segregation on Self-Reported Happiness

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  • Herbst, Chris M.

    ()
    (Arizona State University)

  • Lucio, Joanna

    ()
    (Arizona State University)

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    Abstract

    Previous research consistently finds that racially-based residential segregation is associated with poor economic, health, and social outcomes. The purpose of this paper is to explore the relationship between residential segregation and self-reported happiness. Using panel data from the National Survey of Families and Households (NSFH), we begin by estimating ordinary least squares (OLS) regressions of happiness on a measure of MSA-level segregation, controlling for a rich set of individual, neighborhood, and state characteristics. The OLS results suggest that increased segregation is associated with a reduction in happiness among blacks. To deal more appropriately with the potential endogeneity of location choice, we extend the methodology to fully exploit the panel structure of the NSFH and incorporate individual fixed effects into the happiness equation. Contrary to the OLS results, our fixed effects estimates imply that blacks are happier in more segregated metropolitan areas. The paper discusses the implications of these results within the context of current integration policies.

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    Bibliographic Info

    Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7944.

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    Length: 41 pages
    Date of creation: Feb 2014
    Date of revision:
    Handle: RePEc:iza:izadps:dp7944

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    Keywords: happiness; residential segregation; neighborhood preferences;

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    1. Bruno S. Frey & Alois Stutzer, 2001. "What Can Economists Learn from Happiness Research?," CESifo Working Paper Series 503, CESifo Group Munich.
    2. David Card & Jesse Rothstein, 2005. "Racial Segregation and the Black-White Test Score Gap," Working Papers 93, Princeton University, Department of Economics, Center for Economic Policy Studies..
    3. Di Tella, Rafael & MacCulloch, Robert J. & Oswald, Andrew J., 2001. "The Macroeconomics of Happiness," The Warwick Economics Research Paper Series (TWERPS) 615, University of Warwick, Department of Economics.
    4. Sapna Swaroop & Maria Krysan, 2011. "The Determinants of Neighborhood Satisfaction: Racial Proxy Revisited," Demography, Springer, vol. 48(3), pages 1203-1229, August.
    5. Erzo F. P. Luttmer, 2005. "Neighbors as Negatives: Relative Earnings and Well-Being," The Quarterly Journal of Economics, MIT Press, vol. 120(3), pages 963-1002, August.
    6. Subramanian, S.V. & Acevedo-Garcia, Dolores & Osypuk, Theresa L., 2005. "Racial residential segregation and geographic heterogeneity in black/white disparity in poor self-rated health in the US: a multilevel statistical analysis," Social Science & Medicine, Elsevier, vol. 60(8), pages 1667-1679, April.
    7. Alan B. Krueger & David A. Schkade, 2007. "The Reliability of Subjective Well-Being Measures," NBER Working Papers 13027, National Bureau of Economic Research, Inc.
    8. Chang, Virginia W., 2006. "Racial residential segregation and weight status among US adults," Social Science & Medicine, Elsevier, vol. 63(5), pages 1289-1303, September.
    9. Sendhil Mullainathan & Marianne Bertrand, 2001. "Do People Mean What They Say? Implications for Subjective Survey Data," American Economic Review, American Economic Association, vol. 91(2), pages 67-72, May.
    10. Ludwig, Jens & Duncan, Greg J. & Katz, Lawrence F. & Kessler, Ronald & Kling, Jeffrey R. & Gennetian, Lisa A. & Sanbonmatsu, Lisa, 2012. "Neighborhood Effects on the Long-Term Well-Being of Low-Income Adults," Scholarly Articles 11870359, Harvard University Department of Economics.
    11. Akay, Alpaslan & Bargain, Olivier & Dolls, Mathias & Neumann, Dirk & Peichl, Andreas & Siegloch, Sebastian, 2012. "Happy Taxpayers? Income Taxation and Well-Being," IZA Discussion Papers 6999, Institute for the Study of Labor (IZA).
    12. Lance Freeman, 2005. "Black Homeownership: The Role of Temporal Changes and Residential Segregation at the End of the 20th Century," Social Science Quarterly, Southwestern Social Science Association, vol. 86(2), pages 403-426.
    13. Raj Chetty & Nathaniel Hendren & Patrick Kline & Emmanuel Saez, 2014. "Where is the Land of Opportunity? The Geography of Intergenerational Mobility in the United States," NBER Working Papers 19843, National Bureau of Economic Research, Inc.
    14. Kahneman, Daniel & Wakker, Peter P & Sarin, Rakesh, 1997. "Back to Bentham? Explorations of Experienced Utility," The Quarterly Journal of Economics, MIT Press, vol. 112(2), pages 375-405, May.
    15. David M. Cutler & Edward L. Glaeser, 1995. "Are Ghettos Good or Bad?," NBER Working Papers 5163, National Bureau of Economic Research, Inc.
    16. Douglas Massey & Nancy Denton, 1989. "Hypersegregation in U.S. Metropolitan Areas: Black and Hispanic Segregation Along Five Dimensions," Demography, Springer, vol. 26(3), pages 373-391, August.
    17. Daniel Kahneman & Alan B. Krueger, 2006. "Developments in the Measurement of Subjective Well-Being," Journal of Economic Perspectives, American Economic Association, vol. 20(1), pages 3-24, Winter.
    18. Boyd-Swan, Casey & Herbst, Chris M., 2012. "Pain at the pump: Gasoline prices and subjective well-being," Journal of Urban Economics, Elsevier, vol. 72(2), pages 160-175.
    19. John Logan & Brian Stults & Reynolds Farley, 2004. "Segregation of minorities in the metropolis: two decades of change," Demography, Springer, vol. 41(1), pages 1-22, February.
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