An Experimental Study of Neighborhood Stigma and the Penalty of Place

This grant will tackle the persistent challenge of whether residence in disadvantaged neighborhoods leads to economic disadvantage.

Sharkey and Jacob Faber hypothesize that residence in a disadvantaged neighborhood impacts social interactions, trust, and short-term economic transactions. Using an experimental design, they will observe 1,500 online economic transactions to test whether neighborhood residents are stigmatized by the level of economic disadvantage and crime of the sellers’ neighborhood. The investigators will capitalize on the unique design of Craigslist, which operates with an emphasis on local transactions in dense urban areas. People selling products are identified primarily by their location, allowing investigators to post identical listings from different neighborhoods. Stigma will be measured by the number of responses, size of counter-offers, and responses that suggest suspicion of sellers. The investigators hypothesize that posts originating from sellers in disadvantaged neighborhoods will experience greater stigma and that the effects of neighborhood stigma will be greater in cities with more pronounced levels of economic segregation and concentration of crime. Results from the study may have relevance to similar processes occurring in other urban markets, such as housing and economic development.

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