Many studies show that larger metropolitan areas are more segregated than smaller ones. To some extent, this tendency is part of the conventional wisdom. However, the reason for this tendency is not apparent. This paper suggests that the correlation between segregation and metropolitan scale is spurious. Segregation measures based on census data will tend to rank larger cities higher because larger cities have more neighbourhoods that are big enough to 'fill up' entire census tracts, while smaller cities with equally homogeneous, but smaller, neighbourhoods have to pair neighbourhoods to fill up a census tract. This bias will be reduced at smaller levels of spatial aggregation. This prediction is tested by comparing segregation measures computed at several levels of spatial aggregation and with American Housing Survey data. The results suggest that spatial aggregation effects are important: the correlation between city size and measured segregation appears to be at least partly spurious.

This paper examines the effects of a generous, spatially-targeted economic development policy (the federal Empowerment Zone program) on local neighborhood characteristics and on the neighborhood quality of life, taking into account the interactions amongst the policy, changes in neighborhood demographics and neighborhood housing stock. Urban economic theory posits that housing prices in a small area should increase as quality of life increases, because people will be willing to pay more to live in the area, but these changes in prices and quality of life will also affect the demographics of the population through sorting and the housing stock through reinvestment. Using census block-group-level data, we examine how housing prices respond to the Empowerment Zone policy intervention. Changes in the other dimensions of neighborhood quality (demographics and housing stock characteristics) will also help determine the total -or full -effect on housing values of the policy intervention. This paper estimates these direct and full effects in a simultaneous equations setting, compares direct and indirect effects and examines the robustness of the effects to alternate estimation strategies. We find strong evidence for substantively large and highly significant direct price effects, while results suggest that the indirect effects are substantively small or even negative.

Abstract:This article measures the impacts of historic preservation regulations on property values inside and outside of officially designated historic districts. The analysis relies on a model of historic designation to control for the tendency to designate higher quality properties. An instrumental variables model using rich data on historic significance corrects for this bias. The results for Chicago during the 1990s indicate that price impacts from designation inside a landmark district vary considerably across homes inside the districts. Controlling for extant historic quality, which the market values positively, restrictions apparently have negative price effects on average both within and outside districts.2

Numerous hedonic price analyses estimate price effects associated with hazardous waste site remediation or other environmental variation. This paper estimates a neighborhood transition model to capture the direct price effect from Superfund site cleanup and the indirect price effects arising from residential sorting and changes in investment in the housing stock following cleanup. First-difference models of neighborhood change and a national sample are used. This approach fails to find consistent positive direct price effects. Positive indirect effects, however, may arise through residential sorting and neighborhood investment spurred by remediation. The findings can be sensitive to policy endogeneity and model specification.