This essay reviews Making Our Neighborhoods, Making Our Selves, in which George C. Galster provides an overview of the literatures on neighborhood formation and neighborhood effects. I see two clear ways that Making Our Neighborhoods will serve as a reference strengthening these literatures. Given the state of the literature on neighborhood effects, which is often still at the stage of testing the existence and magnitude of such effects, the author’s framework for classifying the types of heterogeneity we might observe in neighborhood effects will be a valuable tool for researchers. And since the literature on neighborhood formation approaches the issues from a disparate set of fields, the author’s presentation of individual actors shaping neighborhood dynamics while using ideas of equilibrium, belief formation, equity and efficiency, and unpriced externalities should help unify understanding of the economic approach to neighborhood formation. While the author certainly does not shy away from race, I argue that several parts of the presentation would be clearer if they were tied more directly to racial segregation. (JEL D62, D83, I31, J15, R23, R31, Z13)

Abstract This paper estimates neighborhood effects on adult labor market outcomes using the Moving to Opportunity (MTO) housing mobility experiment. We propose and implement a new strategy for identifying transition-specific effects that exploits identification of the unobserved component of a neighborhood choice model. Estimated local average treatment effects (LATEs) are large, result from moves between the first and second deciles of the national distribution of neighborhood quality, and pertain to a subpopulation of nine percent of program participants.