DP13296 Gentrification and pioneer businesses

Author(s): Kristian Behrens, Brahim Boualam, Julien Martin, Florian Mayneris
Publication Date: November 2018
Keyword(s): Gentrification, microgeographic data, New York, pioneer businesses
JEL(s): R14, R23, R31
Programme Areas: International Trade and Regional Economics
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=13296

We build a time-consistent block-level dataset from 1990 to 2010 containing socio-economic characteristics of residents and information on businesses in New York. We identify both gentrifying areas and pioneer sectors characterized by atypical location decisions. The latter-mostly cultural, recreational, and creative industries-help us to better predict and understand gentrification. We find that a block's initial exposure to pioneers has a quantitatively sizable effect in predicting future gentrification. Pioneers foster gentrification through the types of workers they hire, their signal as to the future prospects of a neighborhood, and their effect on the arrival of consumption amenities.