Dujardin, Claire
[UCL]
Peeters, Dominique
[UCL]
Thomas, Isabelle
[UCL]
A recent body of research in the fields of geography, economics and sociology suggests that the spatial structure of cities might influence the socioeconomic characteristics and outcomes of their residents. In particular, the literature on neighbourhood effects emphasises the potential influence of the socioeconomic composition of neighbourhoods in shaping individual’s behaviours and outcomes, through social networks, peer influences or socialisation effects. However, empirical
work has not reached yet a consensus regarding the existence and magnitude of such effects. This is mainly because the study of neighbourhood effects raises important methodological concerns that have not often been taken into account. Notably, as individuals with similar socio-economic characteristics tend to sort themselves into certain parts of the city, the estimation of
neighbourhood effects raises the issue of location-choice endogeneity. Indeed, it is difficult to distinguish between neighbourhood effects and correlated effects, i.e. similarities in behaviours and outcomes arising from individuals having similar characteristics. This problem, if not adequately corrected for, may yield biased results.
In the first part, neighbourhood effects are defined and some methodological problems involved in
measuring such effects identified. Particular attention is paid to the endogeneity issue, giving a formal definition of the problem and reviewing the main methods that have been used in the literature to try to solve it. The secondpart is devoted to an empirical illustration of the study of neighbourhood effects, in the case of labour-market outcomes of young adults in Brussels. To this end, the effect of living in a deprived neighbourhood on the unemployment probability of young adults residing in Brussels is estimated using logistic regressions. The endogeneity of neighbourhood is addressed by restricting the sample to young adults residing with their parents.
However, this method is an imperfect solution. Therefore, a sensitivity analysis is used to assess the robustness of the results to the presence of both observed and unobserved parental covariates. Results show that living in a deprived neighbourhood significantly increases the unemployment probability of young adults. This result is not sensitive to the presence of observed and unobserved
parental characteristics.
| Bibliographic reference |
Dujardin, Claire ; Peeters, Dominique ; Thomas, Isabelle. Neighbourhood effects and endogeneity issues. In: F. Bavaud & C. Mager, Handbook of Theoretical and Quantitative Geography, Université de Lausanne : Lausanne 2009, p. 29-71 |
| Permanent URL |
http://hdl.handle.net/2078/28996 |
