Tipping points in urban neighbourhoods

It has long been felt that racial and economic segregation affects educational, societal, familial, and economic outcomes. It is in this context that it has been a major goal of public policy over the past four decades to reduce racial segregation in neighborhoods, schools, and workplaces. I had blogged earlier about how school choice and educational achievement is dictated by racial segregation annd how different policies have failed to address this issue.

Starting from the seminal research of Thomas Schelling, it is now widely acknowledged that it is impossible to create stable and economically and racially mixed urban neighbourhoods. A number of subsequent models have all concluded that a mixed racial composition is inherently unstable and the only stable equilibria are fully segregated ones. It has been proved that even a small change in the composition sets off a dynamic process that converges to either 0% or 100% minority share.

Now, David Card, Alexandre Mas, and Jesse Rothstein have outlined an alternative "one-sided" tipping model in which neighborhoods with a minority share below a critical threshold are potentially stable, but those that exceed the threshold rapidly shift to 100% minority composition as whites flee the neighbourhood. They find that most major metropolitan areas are characterized by a city-specific "tipping point", a level of the minority share in a neighborhood that once exceeded sets off a rapid exodus of the white population. They also find that the tipping behavior is one-sided, and that neighborhoods with minority shares below the tipping point can attract both white and minority residents.

All this means that it may not be sensible to develop economically mixed residential localities, where the proportion of both the rich and the less well off are sprinkled in more or less equal numbers. It may be more prudent to plan neighbourhoods where either the poor or the rich proportion is less than the tipping point.