Distinguishing Causes of Neighborhood Racial Change: A Nearest Neighbor Design

Whether contemporary households consider the race of their neighbors when choosing a neighborhood is controversial. We study neighborhood choice using a novel research design that contrasts the move rate of homeowners who receive a new different-race neighbor nearby to that of homeowners who live further away on the same block. This approach isolates a component of the household move decision directly attributable to their neighbors’ identities. Both Black and white homeowners are more likely to move after receiving a new different-race neighbor in their immediate vicinity. We discuss heterogeneity in this result and implications for understanding modern neighborhood racial change.