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Publications
  • May 2023
  • Article
  • Regional Science and Urban Economics

Gentrification and Retail Churn: Theory and Evidence

By: Edward L. Glaeser, Michael Luca and Erica Moszkowski
  • Format:Print
  • | Pages:21
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Abstract

How does gentrification transform neighborhood retail amenities? This paper presents a model in which gentrification harms incumbent residents by increasing rental costs and by eliminating distinctive local stores. While rising rents can be offset with targeted transfers, the destruction of neighborhood character can — in principle — reduce overall social surplus. Empirically we find that gentrifying neighborhoods experience faster growth in both the number of retail establishments and business closure rates than their non-gentrifying counterparts. However, we see little evidence that gentrification is associated with changes in retail mix or prices — suggesting limited welfare losses.

Keywords

Gentrification; Neighborhoods; Impact; Local Range; Transition; Civil Society or Community; Welfare; Economic Growth

Citation

Glaeser, Edward L., Michael Luca, and Erica Moszkowski. "Gentrification and Retail Churn: Theory and Evidence." Art. 103879. Regional Science and Urban Economics 100 (May 2023).
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About The Author

Michael Luca

Negotiation, Organizations & Markets
→More Publications

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More from the Authors
  • Experimenting with Algorithm Resume Screening By: Michael Luca, Jesse M. Shapiro, Adrian Obleton, Evelyn Ramirez and Nathan Sun
  • Which Firms Gain from Digital Advertising? Evidence from a Field Experiment By: Weijia Dai, Hyunjin Kim and Michael Luca
  • Shanty Real Estate: Teaching Note Supplement By: Michael Luca
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