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Economic History Seminar: April 16, 2007: American Suburbanization: White Flight and Middle-Class Flight

Leah Platt Boustan (2007), "Flight from the City: The Role of Suburban Political Autonomy and Public Goods" http://www.econ.ucla.edu/lboustan/research_pdfs/research01_blackbox.pdf:

By moving to the suburbs, households can avoid compromising with a diverse urban electorate on property taxes and public expenditures and can send their children to homogenous public schools. I reveal the marginal willingness to pay for this suburban autonomy during the era of post-War suburbanization by comparing prices for housing units on either side of city-suburban borders in three decades (1960, 1970 and 1980) and the changes in these cross-border price gaps over time. Identification arises from the fact that local policy changes discretely at these borders, while housing and neighborhood quality shift more continuously.

Preferred estimates suggest that a 20 percent increase in jurisdiction-level median income increases housing prices by around 5 percent, much of which is due to differences in spending priorities. Rich towns spend more on education and less on police and infrastructure maintenance. Houses in racially diverse jurisdictions lose value in the 1960s, while, in the 1970s, much of this value is restored. This timing coincides with the shock of 1960s riots, which attenuates over time. By 1980, desegregation orders are in place in many cities. Housing prices fall by around 1 percent for each required step in the court remedy, with student re-assignment or bussing associated with price declines of 5-6 percent.

The results suggest that the growing poverty in central cities was an independent cause of suburbanization. As a result, suburbanization may have been subject to a multiplier effect, which can help explain the dramatic and rather sudden decline of central cities in the mid 20th century.

1940-1970:

  • Black population share of northern and western central cities increases from 5% to 16% from 1940-1970.
  • Median city residents earned 2% more than metro average in 1950; 8% less in 1970.

Are these effects of suburbanization, or causes?

Talking about suburbanizaton as a feedback process: initial pulls to the suburbs by highways and FHA mortgages then compounded by white and middle-class flight?

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