Poverty

Portfolios of the Poor: How the World's Poor Live on $2 a Day

Portfolios of the Poor: How the World's Poor Live on $2 a Day
Arabic translation.

Jonathan Morduch, Daryl Collins, Stuart Rutherford, & Orlanda Ruthven
05/24/2016

Portfolios of the Poor: How the World's Poor Live on $2 a Day (Princeton University Press, 2009) tackles the fundamental question of how the poor make ends meet. Over 250 families in Bangladesh, India, and South Africa participated in this unprecedented study of the financial practices of the world's poor.

These households were interviewed every two weeks over the course of a year, reporting on their most minute financial transactions. This book shows that many poor people have surprisingly sophisticated financial lives, saving and borrowing with an eye to the future and creating complex "financial portfolios" of formal and informal tools.

Indispensable for those in development studies, economics, and microfinance, Portfolios of the Poor will appeal to anyone interested in knowing more about poverty and what can be done about it.

Failure vs. Displacement: Why an Innovative Anti-Poverty Program Showed no Net Impact in South India

Failure vs. Displacement: Why an Innovative Anti-Poverty Program Showed no Net Impact in South India
September 2015. Journal of Development Economics 116: 1-16.

Jonathan Morduch, Jonathan Bauchet, & Shamika Ravi
05/24/2016

We analyze a randomized trial of an innovative anti-poverty program in South India, part of a series of pilot programs that provide “ultra-poor” households with inputs to create new, sustainable livelihoods (often tending livestock). In contrast with results from other pilots, we find no lasting net impact on income or asset accumulation in South India. We explore concerns with program implementation, data errors, and the existence of compelling employment alternatives. The baseline consumption data contain systematic errors, and income and consumption contain large outliers. Steps to address the problems leave the central findings largely intact: Wages for unskilled labor rose sharply in the area while the study was implemented, blunting the net impact of the intervention and highlighting one way that treatment effects depend on factors external to the intervention itself, such as broader employment opportunities.

Does Preservation Accelerate Neighborhood Change? Examining the Impact of Historic Preservation in New York City

Does Preservation Accelerate Neighborhood Change? Examining the Impact of Historic Preservation in New York City

Brian J. McCabe and Ingrid Gould Ellen
04/05/2016

Problem, research strategy, and findings: A number of studies have examined the property value impacts of historic preservation, but few have considered how preservation shapes neighborhood composition. In this study, we ask whether the designation of historic districts contributes to changes in the racial composition and socioeconomic status of New York City neighborhoods. Bringing together data on historic districts with a panel of census tracts, we study how neighborhoods change after the designation of a historic district. We find little evidence of changes in the racial composition of a neighborhood, but report a significant increase in socioeconomic status following historic designation.
Takeaway for practice: Our research offers empirical evidence on changes in the racial composition and socioeconomic status of neighborhoods following the designation of a historic district. It suggests that historic preservation can contribute to economic revitalization in urban neighborhoods, but that these changes risk making neighborhoods less accessible to lower-income residents. Planners should consider ways that the city government can work to preserve the highly valued amenities of historic neighborhoods while mitigating the potential for residential displacement.

Neighborhood Effects

Neighborhood Effects
Faber, Jacob W. and Patrick Sharkey. 2015. “Neighborhood Effects.” In International Encyclopedia of the Social & Behavioral Sciences (Second Edition), 443-449.

Jacob William Faber and Patrick Sharkey
09/10/2015

Social scientists have long been concerned with the role of space in systems of stratification. While scholars in the field of ‘neighborhood effects’ have typically focused on how a community affects the life chances of its residents, we argue for a broader view of neighborhood effects that considers how spatial stratification serves to maintain and reproduce inequality across multiple dimensions. This article outlines major theoretical arguments exploring how local residential contexts affect social and economic outcomes at the level of individuals and communities, drawing attention to the empirical challenges to measuring neighborhood effects.

Effect of neighborhood stigma on economic transactions

Effect of neighborhood stigma on economic transactions
Besbris, Max, Jacob W. Faber, Peter Rich, and Patrick Sharkey. 2015. “The effect of neighborhood stigma on economic transactions.” Proceedings of the National Academy of Sciences, 112(16): 4994-4998.

Max Besbris, Jacob W. Faber, Peter Rich, and Patrick Sharkey
09/10/2015

Although previously theorized, virtually no rigorous empirical evidence has demonstrated an impact of neighborhood stigma on individual outcomes. To test for the effects of neighborhood stigma on economic transactions, an experimental audit of an online classified market was conducted in 2013–2014. In this market, advertisements were placed for used iPhones in which the neighborhood of the seller was randomly manipulated. Advertisements identifying the seller as a resident of a disadvantaged neighborhood received significantly fewer responses than advertisements identifying the seller as a resident of an advantaged neighborhood. The results provide strong evidence for an effect of neighborhood stigma on economic transactions, suggesting that individuals carry the stigma of their neighborhood with them as they take part in economic exchanges.

Superstorm Sandy and the Demographics of Flood Risk in New York City.

Superstorm Sandy and the Demographics of Flood Risk in New York City.
Faber, Jacob W. 2015. “Superstorm Sandy and the Demographics of Flood Risk in New York City.” Human Ecology, 43(3): 363-378.

Jacob William Faber
09/01/2015

“Superstorm Sandy” brought unprecedented storm surge to New York City neighborhoods and like previous severe weather events exacerbated underlying inequalities in part because socially marginalized populations were concentrated in environmentally exposed areas. This study makes three primary contributions to the literature on vulnerability. First, results show how the intersection of social factors (i.e., race, poverty, and age) relates to exposure to flooding. Second, disruption to the city’s transit infrastructure, which was most detrimental for Asians and Latinos, extended the consequences of the storm well beyond flooded areas. And third, data from New York City’s 311 system show there was variation in distress across neighborhoods of different racial makeup and that flooded neighborhoods remained distressed months after the storm. Together, these findings show that economic and racial factors overlap with flood risk to create communities with both social and environmental vulnerabilities.

Renting in America’s Largest Cities

Renting in America’s Largest Cities
Conducted by the NYU Furman Center & commissioned by Capital One National Affordable Rental Housing Landscape

Sean Capperis, Ingrid Gould Ellen, and Brian Karfunkel
05/28/2015

The supply of affordable rental housing failed to keep pace with demand in the 11 largest U.S. cities while rents rose faster than household incomes in five of the them. The NYU Furman Center/Capital One National Affordable Housing Landscape examines rental housing affordability trends in the central cities of the nation’s largest metropolitan areas (New York, Los Angeles, Chicago, Houston, Philadelphia, Dallas, San Francisco, Washington, D.C., Boston, Atlanta and Miami) from 2006 to 2013 and illustrates how these trends affected renters as more households chose to rent amid rising rental costs.

Nine of the 11 largest U.S. cities have seen falling vacancy rates and rising rents, which are hurting lower- and middle-income renters. “Affordable” rent should comprise less than 30 percent of a household’s income. With the exception of Dallas and Houston, the average renter in each metropolitan area could not afford the majority of recently available rental units in their city. The cities were even less affordable to low-income renters, who could afford no more than 11 percent of recently available units in the most affordable cities.

Since 2006, there has been an increase in the share of low- and moderate-income renters who are severely rent-burdened— meaning they face rent and utility costs equal to at least half of their income. In 2013, over a quarter of moderate-income renters were severely rent-burdened in seven of the cities in the study, while a significant majority of low-income renters in all 11 cities were severely rent-burdened. The percentage of low-income renters facing severe rent-burdens continued to rise in each of these cities and low-income renters are often most acutely impacted by the lack of affordable housing.

The study also found that in five cities, the proportion of moderate-income renters experiencing severe rent burdens grew remarkably, while in other cities, the situation for moderate-income renters either changed little or even improved.

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