American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Distinguishing Causes of Neighborhood Racial Change: A Nearest-Neighbor Design
American Economic Review
(pp. 3999–4039)
Abstract
We study neighborhood choice using a novel research design that contrasts the move rate of homeowners who receive a new different-race neighbor immediately next-door versus slightly farther away on the same block. This approach isolates a component of preferences directly attributable to neighbors' identities. Both Black and White homeowners are more likely to move after receiving a new different-race neighbor. Findings are robust to additional controls (e.g., income) and alternative research designs. We find evidence of heterogeneity in responses, especially associated with housing density, which has implications for understanding contemporary neighborhood racial change and prospects for maintaining stable, integrated neighborhoods.Citation
Bayer, Patrick, Marcus Casey, W. Ben McCartney, John Orellana-Li, and Calvin Zhang. 2025. "Distinguishing Causes of Neighborhood Racial Change: A Nearest-Neighbor Design." American Economic Review 115 (11): 3999–4039. DOI: 10.1257/aer.20240406Additional Materials
JEL Classification
- D91 Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
- J15 Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
- R23 Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics
- R31 Housing Supply and Markets