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Beyond Treatment Effects: Estimating the Relationship Between Neighborhood Poverty and Individual Outcomes in the MTO Experiment

Author

Listed:
  • Jeffrey B. Liebman

    (Harvard University and NBER)

  • Lawrence F. Katz

    (Harvard University and NBER)

  • Jeffrey R. Kling

    (Princeton University and NBER)

Abstract

Several important social science literatures hinge on the functional relationship between neighborhood characteristics and individual outcomes. Although there have been numerous non-experimental estimates of these relationships, there are serious concerns about their reliability because individuals self-select into neighborhoods. This paper uses data from HUD's Moving to Opportunity (MTO) randomized housing voucher experiment to estimate the relationship between neighborhood poverty and individual outcomes using experimental variation. In addition, it assesses the reliability of non-experimental estimates by comparing them to experimental estimates. We find that our method for using experimental variation to estimate the relationship between neighborhood poverty and individual outcomes - instrumenting for neighborhood poverty with site-by-treatment group interactions - produces precise estimates in models in which poverty enters linearly. Our estimates of nonlinear and threshold models are not precise enough to be conclusive, though many of our point estimates suggest little, if any, deviation from linearity. Our non-experimental estimates are inconsistent with our experimental estimates, suggesting that non-experimental estimates are not reliable. Moreover, the selection pattern that reconciles the experimental and non-experimental results is complex, suggesting that common assumptions about the direction of bias in non-experimental estimates may be incorrect.

Suggested Citation

  • Jeffrey B. Liebman & Lawrence F. Katz & Jeffrey R. Kling, 2004. "Beyond Treatment Effects: Estimating the Relationship Between Neighborhood Poverty and Individual Outcomes in the MTO Experiment," Working Papers 872, Princeton University, Department of Economics, Industrial Relations Section..
    • Handle: RePEc:pri:indrel:493
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    References listed on IDEAS

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    1. Brian A. Jacob, 2004. "Public Housing, Housing Vouchers, and Student Achievement: Evidence from Public Housing Demolitions in Chicago," American Economic Review, American Economic Association, vol. 94(1), pages 233-258, March.
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    6. Jeffrey R. Kling & Jeffrey B. Liebman & Lawrence F. Katz & Lisa Sanbonmatsu, 2004. "Moving to Opportunity and Tranquility: Neighborhood Effects on Adult Economic Self-Sufficiency and Health From a Randomized Housing Voucher Experiment," Working Papers 5, Princeton University, Department of Economics, Industrial Relations Section..
    7. Jeffrey R. Kling & Jeffrey B. Liebman, 2004. "Experimental Analysis of Neighborhood Effects on Youth," Working Papers 1, Princeton University, Department of Economics, Industrial Relations Section..
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    Cited by:

    1. Jens Ludwig & Jeffrey R. Kling, 2007. "Is Crime Contagious?," Journal of Law and Economics, University of Chicago Press, vol. 50, pages 491-518.
    2. Claire Dujardin & Florence Goffette-Nagot, 2005. "Neighborhood effects, public housing and unemployment in France," Post-Print halshs-00180046, HAL.
    3. Jens Ludwig & Jeffrey R. Kling, 2007. "Is Crime Contagious?," Journal of Law and Economics, University of Chicago Press, vol. 50(3), pages 491-518.
    4. repec:pri:cepsud:117kling is not listed on IDEAS
    5. Emla Fitzsimons & Marcos Vera-Hernandez, 2013. "Food for Thought? Breastfeeding and Child Development," IFS Working Papers W13/31, Institute for Fiscal Studies.
    6. Dominique Goux & Eric Maurin, 2007. "Close Neighbours Matter: Neighbourhood Effects on Early Performance at School," Economic Journal, Royal Economic Society, vol. 117(523), pages 1193-1215, October.
    7. Fitzsimons, Emla & Malde, Bansi & Mesnard, Alice & Vera-Hernández, Marcos, 2016. "Nutrition, information and household behavior: Experimental evidence from Malawi," Journal of Development Economics, Elsevier, vol. 122(C), pages 113-126.
    8. Jeffrey R Kling & Jeffrey B Liebman & Lawrence F Katz, 2007. "Experimental Analysis of Neighborhood Effects," Econometrica, Econometric Society, vol. 75(1), pages 83-119, January.
    9. Ricardo Maertens, 2016. "Adverse rainfall shocks and civil war: Myth or reality?," HiCN Working Papers 212, Households in Conflict Network.
    10. repec:pri:cheawb:j_kling_2005 is not listed on IDEAS

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    JEL classification:

    • N32 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - U.S.; Canada: 1913-
    • N33 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Europe: Pre-1913
    • N34 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Europe: 1913-

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