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Research Seminars & Workshops @ IRES

Accounting for Central Neighbourhood Change

Associate Professor Nathaniel Baum-Snow
University of Toronto

Date: 14 March 2017 (Tuesday)
Time: 4.00 – 5.30pm
Venue: RMI Executive Seminar Room
Chair: Prof Deng Yongheng

Nathaniel Baum-Snow is an Associate Professor of Business Economics at the Rotman School of Management at the University of Toronto. He received his Ph.D. in Economics from the University of Chicago in 2005, after which he was in the Economics Department at Brown University for 10 years. Baum-Snow’s research investigates reasons for levels of and changes in the spatial organization of population and economic activity in urban areas. He has evaluated the roles that various types of transportation infrastructure have played in generating changes in urban form in the United States and China. Baum-Snow has also investigated the reasons why workers earn more and have more dispersed wages in larger cities and how these explanations help us to understand the productivity advantages of density. Other work investigates how racial interactions in school and low income housing have influenced urban change at metropolitan area and neighbourhood spatial scales in the United States.

Neighbourhoods within 2 km of most central business districts of U.S. metropolitan areas experienced population declines from 1980 through 2000 but have rebounded markedly since 2000 at greater pace than would be expected from simple mean reversion. Statistical decompositions reveal that 1980-2000 departures of residents without a college degree (of all races) accounted for most of the declines while the return of college educated whites and the stabilization of neighbourhood choices by less educated whites drove most of the post-2000 rebound. The rise of childless households and the increase in the share of the population with a college degree, conditional on race, also promoted 1980-2010 increases in central area population and educational attainment of residents, respectively. Estimation of a neighbourhood choice model shows that changes in choices to live in central neighbourhoods primarily reflect a shifting balance between rising home prices and valuations of local amenities, though 1980-2000 central area population declines also reflect deteriorating nearby labor market opportunities for low-skilled whites. Rising central neighbourhood home prices in 1980-2000 were about equally offset by rising amenity valuations for college-educated whites; however, declining amenity valuations, coupled with rising home prices, incentivized the departures of other demographic groups from central neighbourhoods during this period. Greater increases in amenity valuations after 2000 encouraged college-educated whites to move in and other whites to remain, but were not large enough of a factor to offset rising housing costs for minorities.

For more information please contact IRES at 6516 8288 or 6516 6947

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