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American Economic Review Vol. 115 No. 11 2025

Distinguishing Causes of Neighborhood Racial Change: A Nearest-Neighbor Design

Patrick Bayer®1; Marcus Casey2; W. Ben McCartney3; John Orellana-Li4; Calvin Zhang5

1 Duke University (email: ) · 2 University of Illinois at Chicago (email: ) · 3 McIntire School of Commerce, University of Virginia (email: ) · 4 Federal Reserve Bank of Philadelphia (email: ) · 5 Lundquist College of Business, University of Oregon (email: )

Abstract

We study neighborhood choice using a novel research design that contrasts the move rate of homeowners who receive a new different-race neighbor immediately next-door versus slightly farther away on the same block. This approach isolates a component of preferences directly attributable to neighbors’ identities. Both Black and White homeowners are more likely to move after receiving a new different-race neighbor. Findings are robust to additional controls (e.g., income) and alternative research designs. We find evidence of heterogeneity in responses, especially associated with housing density, which has implications for understanding contemporary neighborhood racial change and prospects for maintaining stable, integrated neighborhoods.

DOI
10.1257/aer.20240406
Volume
115
Issue
11
Pages
3999-4039
Language
en
Sources
bibtex:phds-export.bib openalex crossref

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