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Gentrification

Paper Session

Friday, Jan. 4, 2019 10:15 AM - 12:15 PM

Hilton Atlanta, 215
Hosted By: American Real Estate and Urban Economics Association
  • Chair: Stephen L. Ross, University of Connecticut

Counterfactual Dissimilarity: Can Changes in Demographics and Income Explain Increased Racial Integration in U.S. Cities?

Paul Carrillo
,
George Washington University
Jonathan Rothbaum
,
U.S. Census Bureau

Abstract

Urban areas in the U.S. have experienced important changes in racial/ethnic distributions over the last two decades. In the average urban area today black-white racial integration has increased by about 10 percent between 1990 and 2010. Changes in racial and ethnic distributions and gentrification are often associated with changes in residents' demographic characteristics, such as income, education and age. This paper applies a non-parametric spatial decomposition technique using complete (restricted-use) microdata files from the 1990 Decennial Long Form Census and 2008-2012 American Community Surveys to assess what portion of the changes in racial distributions can be attributed to changes in individual characteristics. We find that that, on average, a little over a third of the observed increase in integration can be accounted for by changes in observed individual characteristics.

The Rising Value of Time and the Origin of Urban Gentrification

Yichen Su
,
Stanford University

Abstract

I estimate a spatial equilibrium model to show that the rising value of high-skilled workers' time is an important driving force behind the gentrification of American central cities. I show that the increasing value of time raises the cost of commuting and exogenously increases the demand for central locations by high-skilled workers. While change in value of time is an initial force behind gentrification, its effect is substantially magnified by endogenous amenity improvement. The model implies that welfare inequality in the recent decades increases by more than the rise in earnings inequality if the forces behind gentrification are considered.

Gentrification and the Location and Well-Being of Original Neighborhood Residents

Davin Reed
,
Federal Reserve Bank of Philadelphia
Quentin Brummet
,
NORC at the University of Chicago

Abstract

We use new longitudinal Census microdata to study how gentrification affects original neighborhood resident adults and children. Gentrification increases out-migration, though out-migrants do not experience worse changes in individual or neighborhood outcomes. At the same time, many residents remain and experience benefits in the form of declining exposure to neighborhood poverty and increasing house values. Rents increase for more-educated but not less-educated renters, and we find few effects on employment, income, or commute distance. Gentrification similarly increases children's exposure to proxies for neighborhood quality, but we find no effects on their educational or labor market outcomes.

Do Gay Male and Lesbian Couples Induce Gentrification?

Amanda Ross
,
University of Alabama
Mia Goodnature
,
University of Alabama
Daniel Henderson
,
University of Alabama

Abstract

Gentrification occurs when run-down areas transition into higher income neighborhoods. While many things are discussed as possible causes of gentrification, there are empirical problems when highlighting a specific mechanism. In this paper, we examine one possible driver of gentrification – the influx of gay and lesbian couples into a community. Anecdotal evidence suggests that there is a relationship between gays and gentrification, but this could be because gays sort into neighborhoods that are more likely to gentrify. To address the endogeneity problem, we employ an instrumental variables strategy using voting results for the state-level equivalent of the Defense of Marriage Act (DOMA) as an instrument for the number of gay couples. We find that areas with more gay and lesbian couples are more likely to experience gentrification. In addition, using semi-parametric techniques we find there is a tipping point after which gentrification occurs. These findings are important for policy makers because understanding the drivers of gentrification is important to designing effective policy to revitalize decaying urban neighborhoods and address the possible problems of gentrification, like displacement, in urban areas.
Discussant(s)
Stephen L. Ross
,
University of Connecticut
Jessie Handbury
,
University of Pennsylvania
Daniel Hartley
,
Federal Reserve Bank of Chicago
Lowell Taylor
,
Carnegie Mellon University
JEL Classifications
  • C1 - Econometric and Statistical Methods and Methodology: General
  • R0 - General