Empirics of Strategic Interdependence: The Case of the Racial Tipping Point
The Schelling model of a "tipping point" in racial segregation, in which whites flee a neighborhood once a threshold of nonwhites is reached, is a canonical model of strategic interdependence. The idea of "tipping" explaining segregation is widely accepted in the academic literature and popular media. I use census tract data for metropolitan areas of the US from 1970 to 2000 to test the predictions of the Schelling model and find that this particular model of strategic interaction largely fails the tests. There is more "white flight" out of neighborhoods with a high initial share of whites than out of more racially mixed neighborhoods
I am grateful for comments received from David Romer, two anonymous referees, Ingrid Gould Ellen, participants in the CEPR Conference on Macroeconomics and Geography in Modena Italy, those in the NBER Summer Institute on Macroeconomics and Inequality, and those in a seminar at UC-Berkeley. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research.
William Easterly, 2009. "Empirics of Strategic Interdependence: The Case of the Racial Tipping Point," The B.E. Journal of Macroeconomics, Berkeley Electronic Press, vol. 9(1). citation courtesy of