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Neighborhood income inequality

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  • Elizabeth A. La Jeunesse
  • Christopher H. Wheeler

Abstract

This paper offers a descriptive empirical analysis of the geographic pattern of income inequality within a sample of 359 US metropolitan areas between 1980 and 2000. Specifically, we decompose the variance of metropolitan area-level household income into two parts: one associated with the degree of variation among household incomes within neighborhoods - defined by block groups and tracts - and the other associated with the extent of variation among households in different neighborhoods. Consistent with previous work, the results reveal that the vast majority of a city?s overall income inequality - at least three quarters - is driven by within-neighborhood variation rather than between-neighborhood variation, although we find that the latter rose significantly during the 1980s, especially between block groups. We then identify a number of metropolitan area-level characteristics that are associated with both levels of and changes in the degree of each type of residential income inequality.

Suggested Citation

  • Elizabeth A. La Jeunesse & Christopher H. Wheeler, 2007. "Neighborhood income inequality," Working Papers 2006-039, Federal Reserve Bank of St. Louis.
    • Handle: RePEc:fip:fedlwp:2006-039
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    Cited by:

    1. Rosenthal, Stuart S. & Ross, Stephen L., 2015. "Change and Persistence in the Economic Status of Neighborhoods and Cities," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 1047-1120, Elsevier.
    2. Wen-Hao Chen & John Myles & Garnett Picot, 2012. "Why Have Poorer Neighbourhoods Stagnated Economically while the Richer Have Flourished? Neighbourhood Income Inequality in Canadian Cities," Urban Studies, Urban Studies Journal Limited, vol. 49(4), pages 877-896, March.
    3. Ortalo-Magné, François & Rady, Sven, 2008. "Heterogeneity within communities: A stochastic model with tenure choice," Journal of Urban Economics, Elsevier, vol. 64(1), pages 1-17, July.
    4. Alejandro Badel, 2010. "Understanding permanent black-white earnings inequality," Working Papers 2010-047, Federal Reserve Bank of St. Louis.

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    Keywords

    Income distribution; Income;

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