The Socio-Economics of Neighbourhoods and Cities: Papers in Urban Economics

This thesis explores the socio-economics of neighbourhoods and cities and the role that changes to labour market opportunities and access to amenities play in determining housing demand and demographic shifts. Many cities are experiencing a spatial inversion in terms of neighbourhood demographics -- city centers are becoming both wealthier and more expensive while peripheral, suburban neighbourhoods are becoming both poorer and less expensive. In a dynamic context, I consider the social and economic processes that contribute to neighbourhood change. Chapter 1 contributes to the literature on neighbourhood change by providing a comprehensive characterization of the dynamics of New York City neighbourhoods. Using a structural breakpoint analysis I provide evidence of which neighbourhoods have changed, when they changed, and the magnitude of the change. I show a clear spatial and temporal pattern to neighbourhood change and I present several results: price increases are larger than price decreases; increases in housing demand precede increases in price growth; and downtown neighbourhoods are increasingly wealthier and a greater fraction white. Chapter 2 explores the extent to which changing labour market characteristics contribute to the patterns of neighbourhood change. I construct a spatial-Bartik instrumental variable as an exogenous measure of neighbourhood labour demand, which is then used to generate predicted income growth rates and house price growth rates. I find that in New York City 21% of the variation in income growth rates and 41% of the variation in house price growth rates between 1990 and 2010 can be explained by exogenous labour demand shocks. Chapter 3 focuses on the influence of the built environment on social behaviours. I find a strong and positive cross-sectional relationship between the built environment and social interactions. Once I address the endogenous decision of where to live, the significant effects found in the cross-section disappear. This implies that there is sorting of relatively social individuals into more walkable neighbourhoods. I find some evidence that this sorting is correlated with life-cycle changes that may affect both residential decisions and social relationships.Ph.D