Volume 4, Number 1 - Urban Economic Development - Spring 2000

Title: The Externalities of Neighbors and the Role of Barriers in Urban Geography

Author: Douglas S. Noonan

Abstract: A general theoretical approach to residential siting decisions can usefully incorporate the externalities of neighborhood characteristics. Because some physical objects may mitigate those externalities, they can be expected to influence peoplesÕ residential patterns and general welfare. In a world where people prefer being near their own kind, the presence of these ÒbarriersÓ encourages residents to cluster along opposing sides of the barrier. Barrier objects thereby induce a greater disparity in neighborhood characteristics than would have prevailed in their absence. Geographic and Census data for Chicago in 1990 support this hypothesis for a variety of barrier types and demographic characteristics (race, ancestry, language, and income).

About the Author: Douglas Noonan is a Ph.D. student at the Harris School of Public Policy Studies at the University of Chicago. He is co-contributing editor of Managing the Commons (Indiana University Press, 1998). He is a graduate of the Jackson School of International Studies at the University of Washington. A former research at the Foundation for Research on Economics and the Environment, his policy area of interest is environmental economics.

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