Title

Neighborhood Effects: Evidence from Wartime Destruction in London

Author(s)

Stephen J. Redding Stephen Redding (Princeton University, NBER and CEPR)

Daniel M. Sturm Daniel Sturm (London School of Economics and CEPR)

Abstract

We use the German bombing of London during the Second World War as an exogenous source of variation to provide evidence on neighborhood effects. We construct a newly digitized dataset at the level of individual buildings on wartime destruction, property values, and socioeconomic composition in London before and after the Second World War. We develop a quantitative spatial model, in which heterogeneous groups of individuals endogenously sort across locations in response to differences in natural advantages, wartime destruction and neighborhood effects. We find substantial and highly localized neighborhood effects, which magnify the direct impact of wartime destruction, and make a substantial contribution to observed patterns of spatial sorting across locations.

Creation Date

2024-04

Section URL ID

Paper Number

322

URL

https://gceps.princeton.edu/wp-content/uploads/2024/04/wp322_ReddingSturm_NE.pdf

File Function

Jel

F16, N9, R23

Keyword(s)

London; England; Great Britain; United Kingdom, Agglomeration, Neighborhood effects, Second World War, Spatial Sorting

Suppress

false

Series

3