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Quantifying the Effect of Neighbourhood on Individuals: Challenges, Alternative Approaches, and Promising Directions

Author

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  • George C. Galster

Abstract

Six major challenges confront statistical researchers attempting to quantify accurately the independent effect of neighbourhood context on individuals: (1) defining the scale of neighbourhood; (2) identifying mechanisms of neighbourhood effect; (3) measuring appropriate neighbourhood characteristics; (4) measuring exposure to neighbourhood; (5) measuring appropriate individual characteristics; and (6) endogeneity. The paper describes these challenges, prior attempts to meet them, and their respective shortcomings. It notes several approaches on the horizon that offer the promise of surmounting these challenges: experiments with varied scales of bespoke neighbourhoods; databases with multi-domain measures of neighbourhood characteristics; statistical models testing for non-linear neighbourhood effects that are stratified by residential group, density of local social interactions, and duration of residency; and econometric devices involving instrumental variables and residuals. It argues that further progress can be made on this front if we take advantage of natural quasi-experiments and push toward fielding a major, new social survey employing a people/place panel design.

Suggested Citation

  • George C. Galster, 2008. "Quantifying the Effect of Neighbourhood on Individuals: Challenges, Alternative Approaches, and Promising Directions," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 128(1), pages 7-48.
  • Handle: RePEc:aeq:aeqsjb:v128_y2008_i1_q1_p7-48
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    Citations

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    Cited by:

    1. Knies, Gundi & Nandi, Alita & Platt, Lucinda, 2014. "Life satisfaction, ethnicity and neighbourhoods: is there an effect of neighbourhood ethnic composition on life satisfaction?," LSE Research Online Documents on Economics 55669, London School of Economics and Political Science, LSE Library.
    2. Plum, Alexander & Knies, Gundi, 2015. "Does neighbourhood unemployment affect the springboard effect of low pay?," ISER Working Paper Series 2015-20, Institute for Social and Economic Research.
    3. Christopher S. Fowler & Nathan Frey & David C. Folch & Nicholas Nagle & Seth Spielman, 2018. "Who are the people in my neighborhood? The ‘contextual fallacy’ of measuring individual context with census geographies," Working Papers 18-11, Center for Economic Studies, U.S. Census Bureau.
    4. Emilia Ene Jones & Florent Sari, 2016. "L’adresse contribue-t-elle à expliquer les écarts de salaires ?. Le cas de jeunes sortant du système scolaire," Revue d'économie régionale et urbaine, Armand Colin, vol. 0(1), pages 203-244.
    5. Nathalie Georges & Yannick L’Horty & Florent Sari, 2015. "Comment réduire la fracture spatiale ? Une application en Île-de-France," Economie & Prévision, La Documentation Française, vol. 0(1), pages 17-37.
    6. Galster, George & Santiago, Anna & Stack, Lisa & Cutsinger, Jackie, 2016. "Neighborhood effects on secondary school performance of Latino and African American youth: Evidence from a natural experiment in Denver," Journal of Urban Economics, Elsevier, vol. 93(C), pages 30-48.
    7. Gustafsson, Björn Anders & Katz, Katarina & Österberg, Torun, 2016. "Residential Segregation from Generation to Generation: Intergenerational Association in Socio-Spatial Context among Visible Minorities and the Majority Population in Metropolitan Sweden," IZA Discussion Papers 9837, Institute for the Study of Labor (IZA).
    8. Abel Brodeur & Sarah Flèche, 2017. "Neighbors' Income, Public Goods and Well-Being," Working Papers 1719E, University of Ottawa, Department of Economics.
    9. Bechara, Peggy & Eilers, Lea & Paloyo, Alfredo R., 2015. "In Good Company – Neighborhood Quality and Female Employment," Ruhr Economic Papers 535, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    10. Lina Hedman & David Manley & Maarten van Ham & John Östh, 2015. "Cumulative exposure to disadvantage and the intergenerational transmission of neighbourhood effects," Journal of Economic Geography, Oxford University Press, vol. 15(1), pages 195-215.
    11. Alexandra Nonnenmacher & Jürgen Friedrichs, 2013. "The Missing Link: Deficits of Country-Level Studies. A Review of 22 Articles Explaining Life Satisfaction," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 110(3), pages 1221-1244, February.
    12. Sara Gleave, 2015. "Associations Between Public Housing and Individual Earnings in New Orleans," Working Papers 15-32, Center for Economic Studies, U.S. Census Bureau.
    13. Nieuwenhuis, Jaap & van Ham, Maarten & Yu, Rongqin & Branje, Susan & Meeus, Wim & Hooimeijer, Pieter, 2016. "Being Poorer than the Rest of the Neighbourhood: Relative Deprivation and Problem Behaviour of Youth," IZA Discussion Papers 10220, Institute for the Study of Labor (IZA).
    14. repec:zbw:rwirep:0535 is not listed on IDEAS
    15. Sari, Florent, 2015. "Public transit and labor market outcomes: Analysis of the connections in the French agglomeration of Bordeaux," Transportation Research Part A: Policy and Practice, Elsevier, vol. 78(C), pages 231-251.
    16. Nieuwenhuis, Jaap & Hooimeijer, Pieter & van Ham, Maarten & Meeus, Wim, 2013. "Neighbourhood Effects on Migrant Youth's Educational Commitments: An Enquiry into Personality Differences," IZA Discussion Papers 7510, Institute for the Study of Labor (IZA).
    17. Peggy Bechara & Lea Eilers & Alfredo R. Paloyo, 2014. "In Good Company – Neighborhood Quality and Female Employment," Ruhr Economic Papers 0535, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    18. repec:spr:ijphth:v:62:y:2017:i:6:d:10.1007_s00038-017-0963-8 is not listed on IDEAS

    More about this item

    JEL classification:

    • B40 - Schools of Economic Thought and Methodology - - Economic Methodology - - - General
    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics
    • C49 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Other

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