Phòng hơn chữa

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How do geographically (địa lý) concentrated (tập trung) income shocks influence the long-run spatial distribution (phân bổ không gian dài hạn) of poverty within a city? We examine the impact on housing prices of a cholera epidemic in one neighborhood of nineteenth century London. Ten years after the epidemic, housing prices (giá nhà) are significantly lower just inside the catchment area of the water pump that transmitted the disease. Moreover, differences in housing prices persist over the following 160 years. We make sense of these patterns by building a model of a rental market with frictions in which poor tenants exert a negative externality on their neighbors. This showcases how a locally concentrated income shock can persistently change the tenant (người thuê nhà) composition of a block.

the new AER piece by Attila Ambrus, Erica Field, and Robert Gonzalez.