The Cost of the Culturati: Studying the Neighborhood Stability Impact of Cultural District Designations

The decision to declare a district for a specific cause is a critical policy decision; making an area an official office park or designated cultural site means it will attract specific types of residents and businesses and require specific amenities. This paper reviews the impact of designating a cultural district as a place-based policy, specifically by developing a measure of neighborhood stability and applying a stress test of neighborhood stability in cultural districts during the Great Recession. The model underpining the neighborhood stability measure is an optimal stopping time model which frames neighborhood rents as a Brownian motion with drift. This structure imposes minimalist assumptions and develops two reduced form parameters which describe individual preferences for how long to live in a neighborhood. This analysis is in the style of \cite{alvarez2015nonparametric}. The parameters are then used to test neighborhood stability, with the result that neighborhoods designated specifically as cultural districts are far less likely to experience negative stability (e.g., large amounts of residential out-migration and thus shorter residency spells) with a causal effect size four times larger than the effect size of a recession itself. However, such neighborhoods are also more likely to experience an influx of newer higher income residents after designation, implying the beneficiaries of the new stability may be those who priced out the original creators of the neighborhood\u27s cultural capital

Neighborhood Loyalty or Neighborhood Entrapment? Explaining Unmeasured Sources of Reduced Geographic Mobility

This paper develops a simple self-selection utility model for leaving a neighborhood. This opens the door for a simple reduced form approach that leverages a hierarchical Bayesian model to obtain an annualized latent push and pull factor for each neighborhood. Posterior analysis indicates that common predictors of neighborhood quality and inputs to classical utility functions systematically under-predict the number of people who stay in a neighborhood. Such underprediction of out-migration can either be viewed as an unexplained variation due to neighborhood \loyalty or as financial barriers to mobility. I isolate this residual, referred to as an \inertia, isolated using a quasi-experimental matching method that uses variation in push factor to isolate eects on pull factors. I show the inertia measure can be explained by measures of financial access including distance to a bank branch, local rates of second mortgage, and redevelopment certifications. The residual from these financial measures is shown to correlate with existence of anchor institutions like charter schools. This methodology creates a robust measure of not only the local push- and pull-factors by neighborhood, but also is suggestive of an economic approach to appraising local community strength