Causal Evidence on the Economic Effects of Neighbourhood Segregation

Neighbourhoods around the world are often segregated by race, ethnicity, and religion. Understanding the socioeconomic consequences of segregation is dominated by descriptive evidence showing segregated areas tend to have more crime, worse employment and lower wealth.

Project Leads: Danny McGowan (PI), Christoph Görtz (CI), and Hisham Farag (CI).

A key question is, why do these disparities exist? Existing evidence overwhelmingly focuses on the composition of people living in segregated neighbourhoods. They tend to come from minority backgrounds with lower educational qualifications resulting in lower incomes and wealth. Integrating ideas from sociology, history and finance, we explore for the first time whether segregation influences these economic outcomes through the housing market. Data will be from archival sources, an experiment, and state-of-the-art machine learning algorithms. The econometric research design is novel, because it isolates causal inferences and produces results that are informative about segregation’s economic repercussions in other settings.