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Empirics of Strategic Interdependence: The Case of the Racial Tipping Point

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  • William Easterly

Abstract

The Schelling model of a "tipping point" in racial segregation, in which whites flee a neighborhood once a threshold of nonwhites is reached, is a canonical model of strategic interdependence. The idea of "tipping" explaining segregation is widely accepted in the academic literature and popular media. I use census tract data for metropolitan areas of the US from 1970 to 2000 to test the predictions of the Schelling model and find that this particular model of strategic interaction largely fails the tests. There is more "white flight" out of neighborhoods with a high initial share of whites than out of more racially mixed neighborhoods

Suggested Citation

  • William Easterly, 2009. "Empirics of Strategic Interdependence: The Case of the Racial Tipping Point," NBER Working Papers 15069, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:15069
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    References listed on IDEAS

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    1. Card, David & Rothstein, Jesse, 2007. "Racial segregation and the black-white test score gap," Journal of Public Economics, Elsevier, vol. 91(11-12), pages 2158-2184, December.
    2. W. Clark, 1988. "Understanding residential segregation in American cities: Interpreting the evidence," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 7(2), pages 113-121, May.
    3. Benabou, Roland, 1996. "Heterogeneity, Stratification, and Growth: Macroeconomic Implications of Community Structure and School Finance," American Economic Review, American Economic Association, vol. 86(3), pages 584-609, June.
    4. David Card & Alexandre Mas & Jesse Rothstein, 2008. "Tipping and the Dynamics of Segregation," The Quarterly Journal of Economics, Oxford University Press, vol. 123(1), pages 177-218.
    5. Durlauf, Steven N, 1996. "A Theory of Persistent Income Inequality," Journal of Economic Growth, Springer, vol. 1(1), pages 75-93, March.
    6. David M. Cutler & Edward L. Glaeser & Jacob L. Vigdor, 1999. "The Rise and Decline of the American Ghetto," Journal of Political Economy, University of Chicago Press, vol. 107(3), pages 455-506, June.
    7. Benabou, R., 1992. "Heterogeneity, Stratification, and Growth," Working papers 93-4, Massachusetts Institute of Technology (MIT), Department of Economics.
    8. Charles T. Clotfelter, 2001. "Are Whites Still Fleeing? Racial Patterns and Enrollment Shifts in Urban Public Schools, 1987-1996," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 20(2), pages 199-221.
    9. David Card & Alexandre Mas & Jesse Rothstein, 2008. "Are Mixed Neighborhoods Always Unstable? Two-Sided and One Sided Tipping," Working Papers 1067, Princeton University, Department of Economics, Industrial Relations Section..
    10. Aaronson, Daniel, 2001. "Neighborhood Dynamics," Journal of Urban Economics, Elsevier, vol. 49(1), pages 1-31, January.
    11. Durlauf,S.N., 2002. "Groups, social influences and inequality : a memberships theory perspective on poverty traps," Working papers 18, Wisconsin Madison - Social Systems.
    12. David Card & Alexandre Mas & Jesse Rothstein, 2008. "Are Mixed Neighborhoods Always Unstable?: Two-Sided and One Sided Tipping," Working Papers 1067, Princeton University, Department of Economics, Industrial Relations Section..
    13. Schelling, Thomas C, 1969. "Models of Segregation," American Economic Review, American Economic Association, vol. 59(2), pages 488-493, May.
    14. Nancy Denton & Douglas Massey, 1991. "Patterns of neighborhood transition in a multiethnic world: U.S. Metropolitan areas, 1970–1980," Demography, Springer;Population Association of America (PAA), vol. 28(1), pages 41-63, February.
    15. Roland Benabou, 1993. "Workings of a City: Location, Education, and Production," The Quarterly Journal of Economics, Oxford University Press, vol. 108(3), pages 619-652.
    16. George Galster, 1988. "Residential segregation in American cities: A contrary review," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 7(2), pages 93-112, May.
    17. Charles T. Clotfelter, 1999. "Are Whites Still "Fleeing"? Racial Patterns and Enrollment Shifts in Urban Public Schools, 1987-1996," NBER Working Papers 7290, National Bureau of Economic Research, Inc.
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    Citations

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    Cited by:

    1. Geoffrey Heal & Howard Kunreuther, 2010. "Social Reinforcement: Cascades, Entrapment, and Tipping," American Economic Journal: Microeconomics, American Economic Association, vol. 2(1), pages 86-99, February.
    2. David Card & Alexandre Mas & Jesse Rothstein, 2008. "Tipping and the Dynamics of Segregation," The Quarterly Journal of Economics, Oxford University Press, vol. 123(1), pages 177-218.
    3. Florent Dubois & Christophe Muller, 2017. "Segregation and the Perception of the Minority," AMSE Working Papers 1718, Aix-Marseille School of Economics, Marseille, France.
    4. Caetano, Gregorio & Maheshri, Vikram, 2017. "School segregation and the identification of tipping behavior," Journal of Public Economics, Elsevier, vol. 148(C), pages 115-135.
    5. Ouazad, Amine, 2015. "Blockbusting: Brokers and the dynamics of segregation," Journal of Economic Theory, Elsevier, vol. 157(C), pages 811-841.
    6. Seul-Ki Shin, 2014. "Preferences vs. Opportunities: Racial/Ethnic Intermarriage in the United States," PIER Working Paper Archive 14-040, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
    7. David Card, 2007. "How Immigration Affects U.S. Cities," CReAM Discussion Paper Series 0711, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
    8. Dana Schüler & Julian Weisbrod, 2006. "Ethnic Fractionalization, Migration and Growth," Ibero America Institute for Econ. Research (IAI) Discussion Papers 148, Ibero-America Institute for Economic Research.
    9. Carlos Castro & Cristhian Rodriguez, 2016. "Racial and spatial interaction for neighborhood dynamics in Chicago," DOCUMENTOS DE TRABAJO 014589, UNIVERSIDAD DEL ROSARIO.
    10. repec:ces:ifodic:v:15:y:2017:i:3:p:50000000000048 is not listed on IDEAS
    11. Jessica Pan, 2015. "Gender Segregation in Occupations: The Role of Tipping and Social Interactions," Journal of Labor Economics, University of Chicago Press, vol. 33(2), pages 365-408.

    More about this item

    JEL classification:

    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • R0 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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