Neighbourhood effects and sorting processes

Sorting processes and the resulting selection effects have been recognised as one of the main factors that undermine the reliability of existing UK estimates of the economic value of various social and environmental (dis)amenities and also of neighbourhood effects. Hitherto, lack of data has meant that it has not been possible to resolve the selection bias arising from omitted sorting effects in UK studies. However, the impact could be profound. For example, someone who loses their job through long term ill health will likely need to move to cheaper accommodation. They are then likely to be sorted by the housing market into poorer neighbourhoods where rents and house prices are cheaper. So the observed cross-sectional correlation between neighbourhood deprivation and poor health may not be causal but, to some extent, the result of residential sorting.

In this project we investigated the impact of residential sorting on the estimation of neighbourhood effects, particularly outcomes arising from prolonged exposure to: (a) concentrated poverty; (b) ethnic/religious segregation; (c) crime; (d) environmental (dis)amenities; (e) proximity to social boundaries; and (f) poor educational opportunities. We also explored the impacts on a variety of outcomes such as: (a) educational performance; (b) employment trajectories/life chances; (c) health and well-being.

Image c/o Flickr/Paddy Patterson