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Abstract We explore the impact of rising incomes at the top of the distribution on spatial sorting patterns within large U.S. cities. We develop and quantify a spatial model of a city with heterogeneous agents and non-homothetic preferences for neighbourhoods with endogenous amenity quality. As the rich get richer, demand increases for the high-quality amenities available in downtown neighbourhoods. Rising demand drives up house prices and spurs the development of higher quality neighbourhoods downtown. This gentrification of downtowns makes poor incumbents worse off, as they are either displaced to the suburbs or pay higher rents for amenities that they do not value as much. We quantify the corresponding impact on well-being inequality. Through the lens of the quantified model, the change in the income distribution between 1990 and 2014 led to neighbourhood change and spatial resorting within urban areas that increased the welfare of richer households relative to that of poorer households, above and beyond rising nominal income inequality.
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Changes in the economic status of neighbourhoods in US metropolitan areas from 1980 to 2010: Stability, growth and polarisation
In this paper we move away from a static view of neighbourhood inequality and investigate the dynamics of neighbourhood economic status, which ties together spatial income inequality at different moments in time. Using census data from three decades (1980–2010) in 294 metropolitan statistical areas, we use a statistical decomposition method to unpack the aggregate spatiotemporal income dynamic into its contributing components: stability, growth and polarisation, providing a new look at the economic fortunes of diverse neighbourhoods. We examine the relative strength of each component in driving the overall pattern, in addition to whether, how, and why these forces wax and wane across space and over time. Our results show that over the long run, growth is a dominant form of change across all metros, but there is a very clear decline in its prominence over time. Further, we find a growing positive relationship between the components of dispersion and growth, in a reversal of prior trends. Looking across metro areas, we find temporal heterogeneity has been driven by different socioeconomic factors over time (such as sectoral growth in certain decades), and that these relationships vary enormously with geography and time. Together these findings suggest a high level of temporal heterogeneity in neighbourhood income dynamics, a phenomenon which remains largely unexplored in the current literature. There is no universal law governing the changing economic status of neighbourhoods in the US over the last 40 years, and our work demonstrates the importance of considering shifting dynamics over multiple spatial and temporal scales.
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- Award ID(s):
- 1759746
- PAR ID:
- 10321261
- Date Published:
- Journal Name:
- Urban Studies
- ISSN:
- 0042-0980
- Format(s):
- Medium: X
- Sponsoring Org:
- National Science Foundation
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- Free Publicly Accessible Full Text
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Accepted Manuscript1.0
- Journal Article:
- https://doi.org/10.1177/00420980211042549
