<p>@denesp comment is right to the point as regards the scope of this question. In street-talk "Gentrification" just means "things get more expensive" ("rightly" or "wrongly", that's another matter). The displacement of poor people will happen, for those who remain poor, where here "poor" is a relative concept "poor enough not to be able to afford the new cost levels".  </p>

<p>What I believe is interesting here is to ask :"Assume that the amenities of an area increase in value, and so rents and "cost of living" goes up. If this value-increase of amenities is also increasing the productivity/efficiency/earnings of the local population, <em>which effect will dominate</em>?" </p>

<p>Will the income-increase of local residents be enough to cover the increased costs of living? </p>

<p>Instinctively speaking, I would say "no", if the productivity-increase comes through education, because the phenomenon of price-increases in such areas happens much faster than the time needed for education to bear income fruits.</p>

CC BY-SA 4.0
2017-04-16T14:17:05.943Z
2018-12-30T23:12:06.717Z
2018-12-30T23:12:06.717Z
Alecos Papadopoulos
<p>Gentrification is, roughly speaking, the displacement or exclusion of poor people from areas with improved amenities due to higher rents and costs of living. The question I have is whether better educational facilities can have a dual effect. That is, if better schooling is an amenity for an area, but raises the wages of poor people by improving the rate of return on education, then will gentrification occur or not?</p>

<hr>

<p>I've been struggling to find good literature on this topic. A few examples of papers I've found (Chicago citations):</p>

<ul>
<li>Guerrieri, Veronica, Daniel Hartley, and Erik Hurst. "<strong><a href="http://www.cbpp.illinois.edu/pdf/hurst_paper.pdf" rel="nofollow noreferrer">Endogenous gentrification and housing price dynamics</a></strong>." Journal of Public Economics 100 (2013): 45-60.</li>
</ul>

<p><em>This paper talks about separating changes in housing prices as changes in housing demand shocks and gentrification. Education or labor demand is not the major point of endogeneity addressed here.</em></p>

<ul>
<li>Baum-Snow, Nathaniel, and Daniel Hartley. "<strong><a href="http://econ.as.nyu.edu/docs/IO/41374/baumsnow_hartley_gentrification_20150930.pdf" rel="nofollow noreferrer">Gentrification and Changes in the Spatial Structure of Labor Demand</a></strong>." (2015).</li>
</ul>

<p><em>This paper creates a model for spatial labor demand changes to better describe the nature of gentrification. Their paper would be very helpful, but it is unfinished.</em></p>

<ul>
<li>Edlund, Lena, Cecilia Machado, and Maria Micaela Sviatschi. <strong><a href="http://ftp.iza.org/dp9502.pdf" rel="nofollow noreferrer">Bright minds, big rent: gentrification and the rising returns to skill</a></strong>. No. w21729. National Bureau of Economic Research, 2015.</li>
</ul>

<p><em>This paper probably gets closest to what I'm looking for, focusing on returns to skill and gentrification. It doesn't exactly focus on education specifically, and though it controls for distance from city center, it doesn't control for things like quality of transportation services (as they admit).</em></p>

<hr>

<p>My question is whether or not there is any literature that is related to the topic I am interested in, or if there isn't any, what previous literature may be relevant to look at during a review of the literature.</p>

CC BY-SA 3.0
2016-12-19T22:35:57.817Z
Wait, I am confused. If the wages of poor people are raised because they had access to better education, then there will be less poor people in their district. (Perhaps housing prices will also rise.) Do you consider this gentrification if no one moved physically?
Giskard
CC BY-SA 3.0
2016-12-19T23:21:30.880Z
I believe the literature doesn't consider that gentrification, as far as I know. There may be differences from how sociology defines it and how economics looks at it though.
Kitsune Cavalry
<reference-request><labor-economics><urban-economics>
Endogenous Gentrification and Rates of Return to Education
Kitsune Cavalry
# Endogenous Gentrification and Rates of Return to Education

(Asked by: username_0 on 2016-12-19)

Gentrification is, roughly speaking, the displacement or exclusion of poor people from areas with improved amenities due to higher rents and costs of living. The question I have is whether better educational facilities can have a dual effect. That is, if better schooling is an amenity for an area, but raises the wages of poor people by improving the rate of return on education, then will gentrification occur or not?

---

I've been struggling to find good literature on this topic. A few examples of papers I've found (Chicago citations):

* Guerrieri, Veronica, Daniel Hartley, and Erik Hurst. "**[Endogenous gentrification and housing price dynamics](http://www.cbpp.illinois.edu/pdf/hurst_paper.pdf)**." Journal of Public Economics 100 (2013): 45-60.

*This paper talks about separating changes in housing prices as changes in housing demand shocks and gentrification. Education or labor demand is not the major point of endogeneity addressed here.*

* Baum-Snow, Nathaniel, and Daniel Hartley. "**[Gentrification and Changes in the Spatial Structure of Labor Demand](http://econ.as.nyu.edu/docs/IO/41374/baumsnow_hartley_gentrification_20150930.pdf)**." (2015).

*This paper creates a model for spatial labor demand changes to better describe the nature of gentrification. Their paper would be very helpful, but it is unfinished.*

* Edlund, Lena, Cecilia Machado, and Maria Micaela Sviatschi. **[Bright minds, big rent: gentrification and the rising returns to skill](http://ftp.iza.org/dp9502.pdf)**. No. w21729. National Bureau of Economic Research, 2015.

*This paper probably gets closest to what I'm looking for, focusing on returns to skill and gentrification. It doesn't exactly focus on education specifically, and though it controls for distance from city center, it doesn't control for things like quality of transportation services (as they admit).*

---

My question is whether or not there is any literature that is related to the topic I am interested in, or if there isn't any, what previous literature may be relevant to look at during a review of the literature.

**Tags:** reference-request, labor-economics, urban-economics
> **Comments:**
> **username_1**: Wait, I am confused. If the wages of poor people are raised because they had access to better education, then there will be less poor people in their district. (Perhaps housing prices will also rise.) Do you consider this gentrification if no one moved physically?  
> **username_0**: I believe the literature doesn't consider that gentrification, as far as I know. There may be differences from how sociology defines it and how economics looks at it though.  

---

## 1 answers

### Answer by username_2 on 2017-04-16. Score: 2 | Accepted answer

@denesp comment is right to the point as regards the scope of this question. In street-talk "Gentrification" just means "things get more expensive" ("rightly" or "wrongly", that's another matter). The displacement of poor people will happen, for those who remain poor, where here "poor" is a relative concept "poor enough not to be able to afford the new cost levels".

What I believe is interesting here is to ask :"Assume that the amenities of an area increase in value, and so rents and "cost of living" goes up. If this value-increase of amenities is also increasing the productivity/efficiency/earnings of the local population, *which effect will dominate*?"

Will the income-increase of local residents be enough to cover the increased costs of living?

Instinctively speaking, I would say "no", if the productivity-increase comes through education, because the phenomenon of price-increases in such areas happens much faster than the time needed for education to bear income fruits.


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