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Assessing the Evidence on Neighborhood Effects from Moving to Opportunity

This paper shows that treatment effects of the Moving to Opportunity (MTO) housing mobility program should not be interpreted as evidence on neighborhood effects. In a standard joint model of potential outcomes and selection into treatment, defining treatment as moving with an MTO voucher generates a model of program effects, while defining treatment as moving to a high-quality neighborhood generates a model of neighborhood effects. I state the assumptions necessary for using the random assignment of vouchers in a housing mobility program as an instrument to identify neighborhood effects. I then show that the literature using program effects to learn about neighborhood effects implicitly imposes dubious versions of these assumptions.

JEL Codes: C30, H50, I38, J10, R00

Keywords: Moving to Opportunity, Neighborhood Effect, Program Effect, Marginal Treatment Effect, Essential Heterogeneity, Strong Ignorability

Suggested citation: Aliprantis, Dionissi, 2011. “Assessing the Evidence on Neighborhood Effects from Moving to Opportunity” Federal Reserve Bank of Cleveland, Working Paper no. 11-22R.

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