Empirics of Strategic Interdependence: The Case of the Racial Tipping Point
NYU Development Research Working Paper No. 5
46 Pages Posted: 27 Feb 2004
Date Written: February 2004
The Schelling model of a "tipping point" in racial segregation, in which whites flee a neighborhood in large numbers once a threshold of nonwhites is reached, is a canonical model of strategic interdependence. Moreover, the idea of "tipping" explaining segregation is widely accepted in the academic literature and popular media. I use census tract data for metropolitan areas of the US from 1970 to 2000 to test the predictions of the Schelling model and find that this particular model of strategic interaction largely fails the tests. There is more "white flight" out of neighborhoods with a high initial share of whites than out of more racially mixed neighborhoods.
Keywords: strategic interdependence, racial segregation, inequality, economic development
JEL Classification: J15, J71, O10, R21
Suggested Citation: Suggested Citation