How Do Parents Perceive the Returns to Parenting Styles and Neighborhoods?

This paper studies parental beliefs about the returns to two factors affecting the development and long-term outcomes of children: (i) parenting styles defined by warmth and control parents employ in raising children, and (ii) neighborhood quality. Based on a representative sample of 2,119 parents in the United States, I show that parents perceive large returns to the warmth dimension of parenting as well as neighborhood quality, and document that they perceive parenting to compensate for the lack of a good environment. I introduce a measurement error correction to show that perceived returns relate to parents’ actual parenting styles, but document that beliefs are unlikely to explain socioeconomic differences in parenting behavior and families’ neighborhood choices.