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Galster, G. Quantifying the Effect of Neighbourhood on Individuals: Challenges, Alternative Approaches, and Promising Directions. Journal of Contextual Economics – Schmollers Jahrbuch, 128(1), 7-48.
Galster, George C. "Quantifying the Effect of Neighbourhood on Individuals: Challenges, Alternative Approaches, and Promising Directions" Journal of Contextual Economics – Schmollers Jahrbuch 128.1, 2008, 7-48.
Galster, George C. (2008): Quantifying the Effect of Neighbourhood on Individuals: Challenges, Alternative Approaches, and Promising Directions, in: Journal of Contextual Economics – Schmollers Jahrbuch, vol. 128, iss. 1, 7-48, [online]


Quantifying the Effect of Neighbourhood on Individuals: Challenges, Alternative Approaches, and Promising Directions

Galster, George C.

Journal of Contextual Economics – Schmollers Jahrbuch, Vol. 128 (2008), Iss. 1 : pp. 7–48

100 Citations (CrossRef)

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Article Details

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George C. Galster, Clarence Hilberry Professor of Urban Affairs, Wayne State University, Detroit, MI 48202, USA.

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Six major challenges confront statistical researchers attempting to quantify accurately the independent effect of neighbourhood context on individuals: (1) defining the scale of neighbourhood; (2) identifying mechanisms of neighbourhood effect; (3) measuring appropriate neighbourhood characteristics; (4) measuring exposure to neighbourhood; (5) measuring appropriate individual characteristics; and (6) endogeneity. The paper describes these challenges, prior attempts to meet them, and their respective shortcomings. It notes several approaches on the horizon that offer the promise of surmounting these challenges: experiments with varied scales of bespoke neighbourhoods; databases with multi-domain measures of neighbourhood characteristics; statistical models testing for non-linear neighbourhood effects that are stratified by residential group, density of local social interactions, and duration of residency; and econometric devices involving instrumental variables and residuals. It argues that further progress can be made on this front if we take advantage of natural quasi-experiments and push toward fielding a major, new social survey employing a people/place panel design.