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Neighborhood Change and Local Economic Activity

Author

Listed:
  • Lorenzo Neri
  • Hector Blanco

Abstract

We study how neighborhood change shapes local business demographics and employment. We use the regeneration of London public housing into mixed-income housing as a natural experiment that led to a large influx of more affluent households. In a difference-in-differences design comparing nearby businesses to those located farther away, we find that regenerations shift business composition - in both counts and employment - away from small local shops and toward larger general retail establishments and dining services that cater to the new residents. While we find no effect on total local employment on average, employment does increase in the areas most disadvantaged at baseline, suggesting that neighborhood change can expand local employment opportunities in these areas.

Suggested Citation

  • Lorenzo Neri & Hector Blanco, 2026. "Neighborhood Change and Local Economic Activity," RFBerlin Discussion Paper Series 26209, ROCKWOOL Foundation Berlin (RFBerlin).
    • Handle: RePEc:crm:wpaper:26209
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    References listed on IDEAS

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    1. Fernando Borraz & Felipe Carozzi & Nicolás González- Pampillón & Leandro Zipitría, 2024. "Local Retail Prices, Product Variety, and Neighborhood Change," American Economic Journal: Economic Policy, American Economic Association, vol. 16(1), pages 1-33, February.
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    3. Raj Chetty & Rebecca Diamond & Thomas B. Foster & Lawrence Katz & Sonya R. Porter & Matthew Staiger & Laura Tach, 2026. "Creating High-Opportunity Neighborhoods: Evidence from the HOPE VI Program," Working Papers 26-02, Center for Economic Studies, U.S. Census Bureau.
    4. Neri, Lorenzo, 2024. "Moving opportunities: The impact of mixed-income public housing regenerations on student achievement," Journal of Public Economics, Elsevier, vol. 230(C).
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    11. Nathaniel Baum-Snow & Daniel Hartley & Kwan Ok Lee, 2019. "The Long-Run Effects of Neighborhood Change on Incumbent Families," Working Paper Series WP-2019-2, Federal Reserve Bank of Chicago.
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    Keywords

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    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy

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