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Understanding Neighbourhood Effects: Selection Bias and Residential Mobility

Lina Bergström (lina.bergstrom@ibf.uu.se) and Maarten van Ham
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Lina Bergström: Uppsala University

No 5193, IZA Discussion Papers from Institute of Labor Economics (IZA)

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: residential mobility; selective mobility; selection bias; neighbourhood effects; migration; neighbourhoods (search for similar items in EconPapers)
JEL-codes: I30 J60 R23 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2010-09
New Economics Papers: this item is included in nep-geo, nep-mig and nep-ure
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Citations: View citations in EconPapers (5)

Published - published in: Van Ham M., Manley D., Bailey N., Simpson L., Maclennan D. (eds.), [Neighbourhood Effects Research: New Perspectives] (Chapter 4), Springer Dordrecht, 2012, 79-99

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