Are mixed community policies evidence based? A review of the research on neighbourhood effects

Abstract

Mixed community policies are frequently justified by a belief in neighbourhood effects. As such they are essentially faith-based since there is scant evidence that increasing socio-economic diversity significantly improves the life chances of poorer residents. A key question that has to be addressed is whether living in a poor neighbourhood is a separate, independent cause of poverty? The chapter reviews the evidence from a wide range of neighbourhood effects studies designed to overcome problems with selection bias: studies based on quasi-experimental data and longitudinal individual level data from a variety of countries. The evidence supporting the significance and even the existence of neighbourhood effects is remarkably thin when subjected to rigorous evaluation. Based on this review it is argued that policies for mixed neighbourhoods treat the symptoms rather than the causes of poverty and that efforts to improve the lives of the poor would be more effectively directed towards people themselves rather than moving people around to mix neighbourhoods. Moreover, it was found that there are real welfare and productivity benefits from living in specialised neighbourhoods. Mixed neighbourhood policies risk of destroying these and the possible losses must be balanced against any potential benefits of reduced negative 'neighbourhood effects'.