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Meeting Urban Housing Needs: Do People Really Come to the Nuisance?

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  • Brooks M. Depro
  • Christopher Timmins
  • Maggie O'Neil
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    Abstract

    Understanding the forces that lead to correlations between pollution exposure, poverty, and race is crucial to the formation of sound environmental justice (EJ) policy. In particular, what are the roles of disproportionate siting of pollution sources versus post-siting housing market dynamics (e.g., “white flight”)? Empirical analysis of post-siting dynamics has yielded mixed evidence. We demonstrate that this is because the models traditionally used to analyze it are not capable of identifying individual responses to pollution exposure. We address this limitation in two ways. First, we show how additional structure can be used along with traditional EJ data to recover behavioral parameters describing market dynamics. Second, we show how market dynamics can be directly observed using a new and distinctive data set that describes the decisions of individual homebuyers and details their circumstances (including pollution exposure) both before and after their moves. An application of the first approach shows that whites are more likely to flee TRI exposure in Los Angeles County than are other minority groups – particularly Hispanics, who constitute a plurality and the largest group of people of color. The second approach shows that whites are both more likely to flee and less likely to come to the nuisance, compared with all other groups (particularly Hispanics). Importantly, these results contrast with those of a traditional EJ analysis, which fails to provide any consistent evidence of post-siting dynamics. If the moving patterns we recover with our two models persist over time, we would expect to see higher percentages of minority residents (particularly Hispanics) living in closer proximity to L.A. County TRI plants, lending support to the post-siting market dynamics hypothesis.

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    Bibliographic Info

    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 18109.

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    Date of creation: May 2012
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    Handle: RePEc:nbr:nberwo:18109

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    References

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    1. Michael Greenstone & Justin Gallagher, 2005. "Does Hazardous Waste Matter? Evidence from the Housing Market and the Superfund Program," NBER Working Papers 11790, National Bureau of Economic Research, Inc.
    2. Patrick Bayer & Robert McMillan & Alvin Murphy & Christopher Timmins, 2011. "A Dynamic Model of Demand for Houses and Neighborhoods," Working Papers, Duke University, Department of Economics 11-16, Duke University, Department of Economics.
    3. Nicolai V. Kuminoff & V. Kerry Smith & Christopher Timmins, 2010. "The New Economics of Equilibrium Sorting and its Transformational Role for Policy Evaluation," NBER Working Papers 16349, National Bureau of Economic Research, Inc.
    4. Patrick J. Bayer & Robert McMillan & Alvin Murphy & Christopher Timmins, 2011. "A Dynamic Model of Demand for Houses and Neighborhoods," Levine's Working Paper Archive 786969000000000213, David K. Levine.
    5. Scott Marchi & James Hamilton, 2006. "Assessing the Accuracy of Self-Reported Data: an Evaluation of the Toxics Release Inventory," Journal of Risk and Uncertainty, Springer, Springer, vol. 32(1), pages 57-76, January.
    6. Steven T. Berry, 1994. "Estimating Discrete-Choice Models of Product Differentiation," RAND Journal of Economics, The RAND Corporation, vol. 25(2), pages 242-262, Summer.
    7. Patrick Bayer & Robert McMillan & Alvin Murphy & Christopher Timmins, 2011. "A Dynamic Model of Demand for Houses and Neighborhoods," NBER Working Papers 17250, National Bureau of Economic Research, Inc.
    8. H. Spencer Banzhaf & Randall P. Walsh, 2010. "Segregation and Tiebout Sorting: Investigating the Link between Investments in Public Goods and Neighborhood Tipping," NBER Working Papers 16057, National Bureau of Economic Research, Inc.
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