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Neighbourhoods, households and income dynamics: a semi-parametric investigation of neighbourhood effects

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

Using a unique data set, we present evidence on income trajectories of people living in micro-neighbourhoods. We investigate neighbourhood influences making as few parametric assumptions as possible. The article offers a number of advances. We exploit a data set that is large, representative, longitudinal, with very local neighbourhoods. We analyse income growth over 1-, 5- and 10-year windows. We analyse the whole distribution of income growth and track large gainers and losers as well as averages. We consider the appropriate definition of neighbourhood. We find no evidence of a negative relationship between neighbourhood disadvantage and subsequent income growth; indeed, some evidence of a positive relationship. Copyright 2007, Oxford University Press.

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Article provided by Oxford University Press in its journal Journal of Economic Geography.

Volume (Year): 7 (2007)
Issue (Month): 1 (January)
Pages: 1-38

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Handle: RePEc:oup:jecgeo:v:7:y:2007:i:1:p:1-38
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  1. David M. Cutler & Edward L. Glaeser, 1995. "Are Ghettos Good or Bad?," NBER Working Papers 5163, National Bureau of Economic Research, Inc.
  2. 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.
  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,W.A. & Durlauf,S.N., 2003. "Multinomial choice with social interactions," Working papers 1, Wisconsin Madison - Social Systems.
  5. Jens Otto Ludwig & Greg Duncan & Paul Hirschfield, 2000. "Urban Poverty and Juvenile Crime: Evidence from a Randomized Housing-Mobility Experiment," JCPR Working Papers 158, Northwestern University/University of Chicago Joint Center for Poverty Research.
  6. Charles F. Manski, 2000. "Economic Analysis of Social Interactions," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 115-136, Summer.
  7. William Brock & Steven N. Durlauf, 2000. "Interactions-Based Models," NBER Technical Working Papers 0258, National Bureau of Economic Research, Inc.
  8. Manski, Charles F, 1993. "Identification of Endogenous Social Effects: The Reflection Problem," Review of Economic Studies, Wiley Blackwell, vol. 60(3), pages 531-42, July.
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