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Working Paper

Evidence of Neighborhood Effects from MTO: LATEs of Neighborhood Quality

This paper finds evidence of positive neighborhood effects on adult labor market outcomes using the Moving to Opportunity (MTO) housing mobility experiment. Our results stand in such sharp contrast to the current literature because our analysis focuses on outcomes of the subpopulation induced by the program to move to a higher quality neighborhood, while previous analyses have focused on outcomes of either the entire population or the subpopulation induced by the program to move to any neighborhood. We propose and implement a new strategy for identifying heterogeneous transition-specific effects that exploits the identification of the idiosyncratic component of an ordered choice model. We estimate Local Average Treatment Effects (LATEs) of the change in quality most commonly induced by MTO vouchers, between the first and second deciles of the national distribution of neighborhood quality. Although MTO vouchers induced much larger changes in neighborhood quality than standard Section 8 vouchers, these LATEs only pertain to a subpopulation representing under 10 percent of program participants.
Topics
Labor economics
Affordable housing
03.30.2012ISSN 2573-7953 WP 12-08Revisions WP 12-08R1, WP 12-08R2, WP 12-08R3DOI 10.26509/frbc-wp-201208
Keywords marginal treatment effect, essential heterogeneity, strong ignorability, local average treatment effect, average causal response, moving to opportunity
JEL Classification Codes C31, C36, C50, D04, I38, R23

Working Papers of the Federal Reserve Bank of Cleveland are preliminary materials circulated to stimulate discussion and critical comment on research in progress. They may not have been subject to the formal editorial review accorded official Federal Reserve Bank of Cleveland publications. The views expressed in this paper are those of the authors and do not represent the views of the Federal Reserve Bank of Cleveland or the Federal Reserve System.

*First version posted March 2012 under the title “Local Average Neighborhood Effects from Moving to Opportunity.” A revision posted in October 2012 was titled “Marginal Neighborhood Effects from Moving to Opportunity.”

Suggested Citation

Aliprantis, Dionissi, and Francisca García-Cobián Richter. 2012. “Evidence of Neighborhood Effects from MTO: LATEs of Neighborhood Quality .” Federal Reserve Bank of Cleveland, Working Paper No. 12-08. https://doi.org/10.26509/frbc-wp-201208