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Escape from the City? The Role of Race, Income, and Local Public Goods in Post-War Suburbanization

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Leah Platt Boustan

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Abstract

Cities are poorer than suburbs and this gap has grown over time. Comparing neighboring houses across city-suburban borders, I find that the marginal homeowner is willing to pay four percent more to live in a town whose median income is one standard deviation above the city’s. Much of this suburban premium reflects fiscal isolation from social problems (especially spending on police). Growing urban poverty can explain around 25 percent of urban population loss from 1940-2000. Furthermore, the demand for wealthy co-residents leads to a vicious cycle of suburbanization, with implications for the rapid decline -- and recent revival -- of cities.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 13311.

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Date of creation: Aug 2007
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Handle: RePEc:nbr:nberwo:13311

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Find related papers by JEL classification:
H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
N92 - Economic History - - Regional and Urban History - - - U.S.; Canada: 1913-
R21 - Urban, Rural, and Regional Economics - - Household Analysis - - - Housing Demand

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  1. Leah Platt Boustan, 2007. "Was Postwar Suburbanization "White Flight"? Evidence from the Black Migration," NBER Working Papers 13543, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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