Understanding Neighbourhood Effects: Selection Bias and Residential Mobility

22 Pages Posted: 27 Sep 2010

See all articles by Lina Bergström

Lina Bergström

affiliation not provided to SSRN

Maarten van Ham

Delft University of Technology - OTB Research Institute for Housing, Urban and Mobility Studies; University of St. Andrews; IZA Institute of Labor Economics

Abstract

The number of studies investigating neighbourhood effects has increased rapidly over the last two decades. Although many of these studies claim to have found evidence for neighbourhood effects, most 'evidence' is likely the result of reversed causality. The main challenge in modelling neighbourhood effects is the (econometric) identification of causal effects. The most severe problem is selection bias as a result of selective sorting into neighbourhoods. This paper argues that in order to further our understanding of neighbourhood effects we should explicitly incorporate neighbourhood sorting into our models. Neighbourhood effect studies are in the situation where the processes behind one of its key methodological problems (selection bias) are also critical to fully understand the neighbourhood context itself. It is thus remarkable that residential mobility and neighbourhood sorting has been almost completely ignored in the neighbourhood effects literature.

Keywords: neighbourhoods, selective mobility, neighbourhood effects, selection bias, migration, residential mobility

JEL Classification: I30, J60, R23

Suggested Citation

Bergström, Lina and van Ham, Maarten, Understanding Neighbourhood Effects: Selection Bias and Residential Mobility. IZA Discussion Paper No. 5193. Available at SSRN: https://ssrn.com/abstract=1682714

Lina Bergström (Contact Author)

affiliation not provided to SSRN ( email )

No Address Available

Maarten Van Ham

Delft University of Technology - OTB Research Institute for Housing, Urban and Mobility Studies ( email )

P.O. Box 5043
2600 GA Delft
Netherlands
+31 15 278 2782 (Phone)

HOME PAGE: http://www.maartenvanham.nl

University of St. Andrews ( email )

North St
Saint Andrews, Fife KY16 9AJ
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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