Assessing the Evidence on Neighborhood Effects from Moving to Opportunity

32 Pages Posted: 6 Jan 2011

See all articles by Dionissi Aliprantis

Dionissi Aliprantis

Federal Reserve Banks - Federal Reserve Bank of Cleveland

Multiple version iconThere are 3 versions of this paper

Date Written: January 4, 2011

Abstract

The interpretation of estimates from Moving to Opportunity (MTO) as neighborhood effects has created significant controversy among social scientists. This paper presents a framework that clarifies the interpretation of results from the MTO housing mobility experiment. The paper defines several neighborhood treatments and estimates their Local Average Treatment Effects (LATEs) using assigned treatment in MTO as an instrumental variable. This framework clarifies that while parameters estimated in the literature do not suffer from selection bias, selection into treatment is an inescapable issue if one seeks to learn about neighborhood effects from MTO. The LATE parameters estimated in this paper are neighborhood effects for the subgroup of MTO families who are compliers with respect to the defined treatment. In contrast, the Treatment-on-the-Treated (TOT) parameters reported in the literature are program effects. Since the subgroup of compliers for various neighborhood treatments can be considerably smaller than the subgroup induced to move by MTO, preliminary estimates indicate that LATE neighborhood effects tend to be much larger than the TOT program effects from MTO. This re-interpretation of the MTO data suggests two important conclusions related to the current understanding of neighborhood effects and programs. First, if alternative housing mobility programs were designed to induce moves to neighborhoods with characteristics other than low poverty, it is entirely feasible that such programs might induce larger effects than MTO. Second, initial LATE estimates appear to reconcile the evidence from MTO with prevailing theories of neighborhood effects.

Keywords: Moving to Opportunity (MTO), Local Average Treatment Effect (LATE),Treatment-on-the-Treated (TOT), Housing Mobility Program, Neighborhood Effect, Concentrated Poverty, Segregation, Social Experiment

JEL Classification: C30, H50, I38, J10, R00

Suggested Citation

Aliprantis, Dionissi, Assessing the Evidence on Neighborhood Effects from Moving to Opportunity (January 4, 2011). FRB of Cleveland Working Paper No. 11-01, Available at SSRN: https://ssrn.com/abstract=1734971 or http://dx.doi.org/10.2139/ssrn.1734971

Dionissi Aliprantis (Contact Author)

Federal Reserve Banks - Federal Reserve Bank of Cleveland ( email )

East 6th & Superior
Cleveland, OH 44101-1387
United States

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