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The Stability of Mixed Income Neighborhoods in America

Author

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  • Krupka, Douglas J.

    (University of Michigan)

Abstract

Whether people of differing types can live happily together is one of the most important social and political questions concerning urban areas. From a variety of theoretical perspectives, such mixing seems extremely unlikely. While the theoretical result seems well supported in the context of race, the evidence for income mixing is much less stark. Compared to the strict segregation predicted by the models (and embodied in the context of race), Americans live in economically diverse neighborhoods. While this has lead to some further theoretical experiments, the stability of this mixing has never been addressed as an empirical matter. It would be naïve to look at cross-sectional snapshots of income mixing as representing stable situations, since neighborhood change is a prevalent feature of American urban economies. This paper sketches out the empirical implications of slow transition towards the predicted equilibrium, and tests those implications. It is the first paper to directly evaluate the persistence and stability of mixed-income communities. The results are supportive of the three models of income segregation: income mixing appears to be unstable, although the adjustment process is slow. This work is of especial importance due to the focus mixed-income communities receive in the urban planning and policy.

Suggested Citation

  • Krupka, Douglas J., 2008. "The Stability of Mixed Income Neighborhoods in America," IZA Discussion Papers 3370, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp3370
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    References listed on IDEAS

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    1. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416-416.
    2. Frankel, David M., 1998. "A Pecuniary Reason for Income Mixing," Journal of Urban Economics, Elsevier, vol. 44(1), pages 158-169, July.
    3. Rosenthal, Stuart S., 2008. "Old homes, externalities, and poor neighborhoods. A model of urban decline and renewal," Journal of Urban Economics, Elsevier, vol. 63(3), pages 816-840, May.
    4. Schelling, Thomas C, 1969. "Models of Segregation," American Economic Review, American Economic Association, vol. 59(2), pages 488-493, May.
    5. Vincent P. Miller & John M. Quigley, 1990. "Segregation by Racial and Demographic Group: Evidence from the San Francisco Bay Area," Urban Studies, Urban Studies Journal Limited, vol. 27(1), pages 3-21, February.
    6. Miyao, Takahiro, 1978. "Dynamic Instability of a Mixed City in the Presence of Neighborhood Externalities," American Economic Review, American Economic Association, vol. 68(3), pages 454-463, June.
    7. Douglas J. Krupka, 2007. "Are Big Cities More Segregated? Neighbourhood Scale and the Measurement of Segregation," Urban Studies, Urban Studies Journal Limited, vol. 44(1), pages 187-197, January.
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    Cited by:

    1. McKinnish, Terra & White, T. Kirk, 2011. "Who moves to mixed-income neighborhoods?," Regional Science and Urban Economics, Elsevier, vol. 41(3), pages 187-195, May.
    2. Cheshire, Paul, 2009. "Policies for mixed communities: faith-based displacement activity?," LSE Research Online Documents on Economics 30783, London School of Economics and Political Science, LSE Library.

    More about this item

    Keywords

    mixed-income; urban policy; neighborhood dynamics; neighborhood change; sorting; segregation;

    JEL classification:

    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • N9 - Economic History - - Regional and Urban History
    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy

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