The Consequences of Gentrification: A Focus on Residents’ Financial Health in Philadelphia
Lei Ding and
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Lei Ding: Federal Reserve Bank of Philadelphia
Jackelyn Hwang: Princeton University
No 16-22, Working Papers from Federal Reserve Bank of Philadelphia
There have been considerable debate and controversy about the effects of gentrification on neighborhoods and the people residing in them. This paper draws on a unique large-scale consumer credit database to examine the relationship between gentrification and the credit scores of residents in the City of Philadelphia from 2002 to 2014. We find that gentrification is positively associated with changes in residents’ credit scores on average for those who stay, and this relationship is stronger for residents in neighborhoods in the more advanced stages of gentrification. Gentrification is also positively associated with credit score changes for less advantaged residents (low credit score, older, or longer term residents, and those without mortgages) if they do not move, though the magnitude of this positive association is smaller than for their more advantaged counterparts. Nonetheless, moving from gentrifying neighborhoods is negatively associated with credit score changes for less advantaged residents, residents who move to lower-income neighborhoods, and residents who move to any other neighborhoods within the city (instead of outside the city) relative to those who stay. The results demonstrate how the association between gentrification and residents’ financial health is uneven, especially for less advantaged residents.
Keywords: Gentrification; Credit scores; Residential mobility (search for similar items in EconPapers)
JEL-codes: D14 J11 J6 R23 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ban, nep-geo and nep-ure
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