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Neighborhood income inequality

  • Christopher H. Wheeler
  • Elizabeth A. La Jeunesse

This paper offers a descriptive empirical analysis of the geographic pattern of income inequality within a sample of 359 US metropolitan areas between 1980 and 2000. Specifically, we decompose the variance of metropolitan area-level household income into two parts: one associated with the degree of variation among household incomes within neighborhoods - defined by block groups and tracts - and the other associated with the extent of variation among households in different neighborhoods. Consistent with previous work, the results reveal that the vast majority of a city’s overall income inequality - at least three quarters - is driven by within-neighborhood variation rather than between-neighborhood variation, although we find that the latter rose significantly during the 1980s, especially between block groups. We then identify a number of metropolitan area-level characteristics that are associated with both levels of and changes in the degree of each type of residential income inequality.

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Paper provided by Federal Reserve Bank of St. Louis in its series Working Papers with number 2006-039.

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Date of creation: 2007
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Handle: RePEc:fip:fedlwp:2006-039
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  1. Anna Hardman & Yannis Ioannides, 2004. "Neighbors’ Income Distribution: Economic Segregation and Mixing in US Urban Neighborhoods," Discussion Papers Series, Department of Economics, Tufts University 0421, Department of Economics, Tufts University.
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  3. Yannis Ioannides, 2001. "Neighborhood Income Distributions," Discussion Papers Series, Department of Economics, Tufts University 0103, Department of Economics, Tufts University.
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  12. Cutler, David & Vigdor, Jacob & Glaeser, Edward, 1999. "The Rise and Decline of the American Ghetto," Scholarly Articles 2770033, Harvard University Department of Economics.
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