Neighbours, Barriers and Urban Environments: Are Things 'Different on the Other Side of the Tracks'?

Most earlier models of residential sorting employ a 'featureless plain', paying little attention to cities' physical environments. The empirical question of physical features mitigating neighbour externalities remains largely unexplored. This article adds to the literature by considering the environmental aspects of group boundaries. Physical barriers that mitigate the externality of neighbours' characteristics should be expected to have important differential effects on urban land use patterns. This hypothesis is tested for the percentage of Black people in Chicago in 2000. Some features (such as, parks, railroads, major roads) have strong barrier effects. Despite the limitations of this approach, the findings appear robust to spatial dependence in the data. The findings hold important implications for future research into residential location decisions and the planning of public amenities and infrastructure.