Neighborhood Sorting Obscures Neighborhood Effects in the Opportunity Atlas
The Opportunity Atlas (OA) is an innovative data set that ranks neighborhoods according to children’s adult outcomes in several domains, including income. Conceptually, outcomes offer new evidence about neighborhood effects when measured in isolation from neighborhood sorting. This paper shows that neighborhood sorting contributes to OA estimates. We document cases in which small sample sizes and changes over time can explain disagreements between OA rankings and those based on contemporaneous variables. Our results suggest caution for interpretations of the OA data set at a granular level, particularly for predictions about the outcomes of black children in high-income neighborhoods.
Keywords: neighborhood sorting, neighborhood effect, Opportunity Atlas.
JEL Codes: R23, C81, J15, I38.
Suggested citation: Aliprantis, Dionissi, and Hal Martin. 2020. “Neighborhood Sorting Obscures Neighborhood Effects in the Opportunity Atlas.” Federal Reserve Bank of Cleveland, Working Paper No. 20-37. https://doi.org/10.26509/frbc-wp-202037.