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Neighborhood Effects: Evidence from Wartime Destruction in London

Author

Listed:
  • Stephen J. Redding

    (Princeton University, NBER and CEPR)

  • Daniel M. Sturm

    (London School of Economics and CEPR)

Abstract
We use the German bombing of London during the Second World War as an exogenous source of variation to provide evidence on neighborhood effects. We construct a newly digitized dataset at the level of individual buildings on wartime destruction, property values, and socioeconomic composition in London before and after the Second World War. We develop a quantitative spatial model, in which heterogeneous groups of individuals endogenously sort across locations in response to differences in natural advantages, wartime destruction and neighborhood effects. We find substantial and highly localized neighborhood effects, which magnify the direct impact of wartime destruction, and make a substantial contribution to observed patterns of spatial sorting across locations.

Suggested Citation

  • Stephen J. Redding & Daniel M. Sturm, 2024. "Neighborhood Effects: Evidence from Wartime Destruction in London," Working Papers 322, Princeton University, Department of Economics, Center for Economic Policy Studies..
    • Handle: RePEc:pri:cepsud:322
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    London; England; Great Britain; United Kingdom; Agglomeration; Neighborhood effects; Second World War; Spatial Sorting;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • N9 - Economic History - - Regional and Urban History
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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