Ratio Working Papers,
The Ratio Institute

Abstract: This literature review outlines research on how individual preferences can lead to segregation, even in the absence of discriminatory policy and other constraints. From Schelling’s (1971) Spatial Proximity model comes the theoretical conclusion that moderate preferences for own-group neighbors (e.g. immigrants or natives) may lead to complete segregation between the two groups over time. Schelling’s Bounded Neighborhood model provides the theoretical conclusion that the stable equilibrium reached (e.g. an ‘all immigrant’ or ‘all native’ neighborhood) ultimately depends on the initial distribution of agents and their relative speeds of movement. This is because in the unstable, integrated, equilibrium an apparently insignificant event can set in motion an irreversible process toward segregation by tipping the distribution one way or another. Both models highlight how well-intentioned individual preferences may result in undesirable aggregate outcomes, whereby good intentions and some level tolerance toward others are not enough to prevent the self-segregation mechanism. The review also covers several key empirical applications and limitations in research in this field.

Keywords: Neighborhoods; Segregation; Schelling model; Urban Area

JEL-codes: J15; O15; P25; R23

25 pages, December 30, 2017

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