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INEQUALITY AND THE MEASUREMENT OF RESIDENTIAL SEGREGATION BY INCOME IN AMERICAN NEIGHBORHOODS
Author(s) -
Watson Tara
Publication year - 2009
Publication title -
review of income and wealth
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.024
H-Index - 57
eISSN - 1475-4991
pISSN - 0034-6586
DOI - 10.1111/j.1475-4991.2009.00346.x
Subject(s) - economics , economic inequality , inequality , income distribution , income inequality metrics , metropolitan area , demographic economics , distribution (mathematics) , sorting , index (typography) , percentile , labour economics , geography , statistics , mathematics , mathematical analysis , archaeology , algorithm , world wide web , computer science
American metropolitan areas have experienced rising residential segregation by income since 1970. One potential explanation for this change is growing income inequality. However, measures of residential sorting are typically mechanically related to the income distribution, making it difficult to identify the impact of inequality on residential choice. This paper presents a measure of residential segregation by income, the Centile Gap Index (CGI), which is based on income percentiles. Using the CGI, I find that a one standard deviation increase in income inequality raises residential income segregation by 0.4–0.9 standard deviations. Inequality at the top of the distribution is associated with more segregation of the rich, while inequality at the bottom and declines in labor demand for less‐skilled men are associated with residential isolation of the poor. Inequality can fully explain the rise in income segregation between 1970 and 2000.