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Assessing the Evidence on Neighborhood Effects from Moving to Opportunity

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  • Dionissi Aliprantis

Abstract

The Moving to Opportunity (MTO) experiment randomly assigned housing vouchers that could be used in low-poverty neighborhoods. Consistent with the literature, I find that receiving an MTO voucher had no effect on outcomes like earnings, employment, and test scores. However, after studying the assumptions identifying neighborhood effects with MTO data, this paper reaches a very different interpretation of these results than found in the literature. I first specify a model in which the absence of effects from the MTO program implies an absence of neighborhood effects. I present theory and evidence against two key assumptions of this model: That poverty is the only determinant of neighborhood quality, and that outcomes only change across one threshold of neighborhood quality. I then show that in a more realistic model of neighborhood effects that relaxes these assumptions, the absence of effects from the MTO program is perfectly compatible with the presence of neighborhood effects. This analysis illustrates why the implicit identification strategies used in the literature on MTO can be misleading. This paper is a revision of a working paper previously published as 11-22, 11-22R, 12-33, and 12-33R. WP 15-05

Suggested Citation

  • Dionissi Aliprantis, 2015. "Assessing the Evidence on Neighborhood Effects from Moving to Opportunity," Working Papers (Old Series) 1506, Federal Reserve Bank of Cleveland.
    • Handle: RePEc:fip:fedcwp:1506
    DOI: 10.26509/frbc-wp-201506
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    Cited by:

    1. Dionissi Aliprantis & Daniel Kolliner, 2015. "Neighborhood Poverty and Quality in the Moving to Opportunity Experiment," Economic Commentary, Federal Reserve Bank of Cleveland, issue April.
    2. Dionissi Aliprantis, 2011. "Community-Based Well Maintenance in Rural Haiti," OVE Working Papers 0611, Inter-American Development Bank, Office of Evaluation and Oversight (OVE).
    3. Dionissi Aliprantis & Daniel R. Carroll, 2018. "Neighborhood dynamics and the distribution of opportunity," Quantitative Economics, Econometric Society, vol. 9(1), pages 247-303, March.
    4. Aliprantis, Dionissi & Carroll, Daniel R. & Young, Eric R., 2024. "What explains neighborhood sorting by income and race?," Journal of Urban Economics, Elsevier, vol. 141(C).
    5. Geoffrey K. Turnbull & Arno J. van der Vlist, 2023. "After the Boom: Transitory and Legacy Effects of Foreclosures," The Journal of Real Estate Finance and Economics, Springer, vol. 66(2), pages 422-442, February.
    6. Dionissi Aliprantis, 2012. "Redshirting, Compulsory Schooling Laws, and Educational Attainment," Journal of Educational and Behavioral Statistics, , vol. 37(2), pages 316-338, April.
    7. Joseph G. Altonji & Richard K. Mansfield, 2014. "Group-Average Observables as Controls for Sorting on Unobservables When Estimating Group Treatment Effects: the Case of School and Neighborhood Effects," NBER Working Papers 20781, National Bureau of Economic Research, Inc.
    8. Thomas A. Garrett, 2011. "A Federal Reserve System conference on research in applied microeconomics," Review, Federal Reserve Bank of St. Louis, vol. 93(Nov), pages 455-462.
    9. Shelly Lundberg, 2023. "Gender Economics: Dead-Ends and New Opportunities," Research in Labor Economics, in: 50th Celebratory Volume, volume 50, pages 151-189, Emerald Group Publishing Limited.
    10. Dionissi Aliprantis, 2017. "Human capital in the inner city," Empirical Economics, Springer, vol. 53(3), pages 1125-1169, November.
    11. Dionissi Aliprantis & Francisca Richter, 2012. "Local average neighborhood effects from moving to opportunity," Working Papers (Old Series) 1208, Federal Reserve Bank of Cleveland.
    12. Rebecca Diamond & Tim McQuade, 2019. "Who Wants Affordable Housing in Their Backyard? An Equilibrium Analysis of Low-Income Property Development," Journal of Political Economy, University of Chicago Press, vol. 127(3), pages 1063-1117.
    13. Koki Fusejima, 2020. "Identification of multi-valued treatment effects with unobserved heterogeneity," Papers 2010.04385, arXiv.org, revised Apr 2023.
    14. Dionissi Aliprantis, 2018. "What Is the Equity-Efficiency Tradeoff When Maintaining Wells in Rural Haiti?," The World Bank Economic Review, World Bank, vol. 32(2), pages 482-504.
    15. Dionissi Aliprantis, 2019. "Racial Inequality, Neighborhood Effects, and Moving to Opportunity," Economic Commentary, Federal Reserve Bank of Cleveland, issue October.
    16. Matthew Klesta & Frank Manzo & Francisca Richter & Mark S. Sniderman, 2013. "Low-income-rental-housing programs in the Fourth District," Working Papers (Old Series) 1311, Federal Reserve Bank of Cleveland.
    17. Dionissi Aliprantis, 2013. "Covariates and causal effects: the problem of context," Working Papers (Old Series) 1310, Federal Reserve Bank of Cleveland.
    18. Dionissi Aliprantis & Hal Martin, 2020. "Neighborhood Sorting Obscures Neighborhood Effects in the Opportunity Atlas," Working Papers 20-37, Federal Reserve Bank of Cleveland.
    19. Gregory Price, 2013. "Hurricane Katrina as an Experiment in Housing Mobility and Neighborhood Effects: Were the Relocated Poor Black Evacuees Better-Off?," The Review of Black Political Economy, Springer;National Economic Association, vol. 40(2), pages 121-143, June.
    20. Geoffrey K. Turnbull & Arno J. van der Vlist, 2022. "Bargaining power and segmented markets: Evidence from rental and owner‐occupied housing," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 50(5), pages 1307-1333, September.
    21. Dionissi Aliprantis & Francisca G.-C. Richter, 2020. "Evidence of Neighborhood Effects from Moving to Opportunity: Lates of Neighborhood Quality," The Review of Economics and Statistics, MIT Press, vol. 102(4), pages 633-647, October.
    22. Aliprantis, Dionissi & Kolliner, Daniel, 2015. "Neighborhood Poverty and Quality in the Moving to Opportunity Experiment," Economic Commentary, Federal Reserve Bank of Cleveland, issue April.
    23. Sebastian Galiani & Alvin Murphy & Juan Pantano, 2015. "Estimating Neighborhood Choice Models: Lessons from a Housing Assistance Experiment," American Economic Review, American Economic Association, vol. 105(11), pages 3385-3415, November.

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    More about this item

    Keywords

    Moving to Opportunity; Neighborhood Effect; Program Effect;
    All these keywords.

    JEL classification:

    • C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General
    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General

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