Gentrification and Retail Churn: Theory and Evidence

Edward Glaeser, Michael Luca and Erica Moszkowski

No 28271, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: How does gentrification transform neighborhood retail amenities? This paper presents a model in which gentrification harms incumbent resident by increasing rental costs and by eliminating distinctive local stores. While rising rents can be offset with targeted transfers, the destruction of neighborhood character can – in principle – reduce overall social surplus. Empirically we find that gentrifying neighborhoods experience faster growth in both the number of retail establishments and business closure rates than their non-gentrifying counterparts. However, we see little evidence that gentrification is associated with changes in retail mix or prices – suggesting limited welfare losses.

JEL-codes: H75 J15 L81 R30 (search for similar items in EconPapers)
Date: 2020-12
New Economics Papers: this item is included in nep-ltv and nep-ure
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Published as Edward L. Glaeser & Michael Luca & Erica Moszkowski, 2023. "Gentrification and retail churn: Theory and evidence," Regional Science and Urban Economics, .

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