Community Choice in Large Cities: Selectivity and Ethnic Sorting Across Neighborhoods

PWP-CCPR-2010-027

Abstract

Neighborhoods and communities are seen as central to the organization of our cities, and to our lives within them. Indeed we are often defined by where we live and marketing groups are adept at using demographic characteristics of particular areas to sell goods and services. Clearly, our cities are divided by socio-economic status and ethnicity and that division is summarized in variation across neighborhoods within the residential fabric. Thus, the issue of neighborhood selection and how selection creates neighborhood outcomes is central in neighborhood studies. The current presentation reviews the literature on neighborhood selection to evaluate the contextual effects of neighborhoods, and then uses data from the Panel Study of Income Dynamics to examine the impacts of different movements across neighborhoods. Not surprisingly the paper will emphasize the reinforcing nature of moves but will also use the analysis to examine the outcomes for movers who move up and down the socio-economic status scale. There is clear evidence that ethnic and racial groups are advantaged when they have greater resources. Money matters in the choices of ethnic combinations and in moving up the status scale. This would not be remarkable except that there is substantial US literature which continues to downplay income and wealth as critical variables in neighborhood selection.