It’s been widely noted that poor neighborhoods tend to bear a disportioncate share of the exposure to environmental disamenities of all kinds. In the highway building era of the 1950s and 1960s, states and cities found it cheaper and politically easier to route new roads through poor neighborhoods, not only dislocating the local populace, but exposing the remaining residents to higher levels of air pollution. So, as environmental justice advocates regularly point out, we’ve made policy decisions that shift the burden of pollution on to the poor.

Hazardous to your health, and neighborhood (Flickr: Otodo)
Hazardous to your health–and your neighborhood (Flickr: Otodo)

Its widely recognized that environmental pollution (like other disamenities, such as high crime rates) depresses property values and rents.  If a neighborhood is highly polluted or crime-ridden, people with the economic wherewithal to move elsewhere typically will. When they abandon dirty or dangerous places, the rents fall, and by definition, the residents of these neighborhoods disproportionately become those who lack the resources to afford a better alternative:  the poor.  While it is undoubtedly the case that polluting activities tend to locate near poor neighborhoods, it also turns out to be the case that the poor end up living in more polluted places.

A new study from the St. Andrews University–“East Side Story: Historical Pollution and Persistent Neighborhood Sorting“–by Stephan Heblich, Alex Trew and Yanos Zylberberg provides an interesting historical perspective on this process.  It has long been noted that the “East End” of many industrial cities is the location of the greatest concentrations of poverty. In these cities, the prevailing wind direction is from the West, with the result that smoke and other air pollutants from the city tend to be most severe in the East (and air quality is generally better in the West).  By digitizing data on the location of Victorian-era smokestacks, and combining that data with modern atmospheric modeling, the authors were able to estimate 19th Century pollution levels by neighborhood, and examine the correlation between concentrations of poverty and air pollution.  (They proxied income levels by looking at the occupational composition of different neighborhoods, an approach akin to that used by Richard Florida).

The study shows that variations in pollution levels are significant factors in explaining the distribution of poverty within cities in the 19th century.  The authors conclude:

The negative correlation is both economically and statistically significant at the peak of pollution in 1881: pollution explains at least 15% of the social composition across neighborhoods of the same city.

This, of course, is an interesting finding in its own right, but there’s more.  Since the peak of unfettered coal burning a century ago, Britain, and other countries have done a lot to reduce air pollution.  Many of the mills and powerplants that produced all that Victorian pollution are long since gone, and the air in these formerly polluted neighborhoods is much cleaner. What’s interesting is that those 19th century levels of pollution are still correlated with concentrations of poverty today.  The authors find that 1881 pollution levels are a statistically significant explainer of the distribution of poverty in levels in the past decade.

This suggests that pollution played a critical role in initially establishing the concentration of poverty in these neighborhoods, but that once established, poverty was self-reinforcing. While pollution was the initial dis-amenity that attracted the poor and discouraged the rich; once the neighborhood was poor, poverty itself became the dis-amenity that fueled this sorting process.  Another study using historical data on marshes in New York, finds a similar historical persistence of poverty.  Economist Carlos Villereal has an interesting paper entitled “Where the Other Half Lives: Evidence on the Origin and Persistence of Poor Neighborhoods from New York City 1830-2012.” He finds that in the 19th century, the lower-lying marshy areas of Manhattan were regarded as less desirable, and generally were concentrations of poverty.  Many of these same patterns persist even today.

Ownership and Sorting

The St. Andrews study offers one other surprising insight about neighborhood change. One factor that over time ameliorated the concentration of poverty in UK cities was the construction of “council housing”–what we in the US would call public housing. In general, council housing was constructed in a very wide range of neighborhoods, was in public ownership, and was rented out to its tenants.  Because it was built in both the legacy polluted/poor neighborhoods and in less poor neighborhoods, it had the effect, over time, of reducing concentrated poverty. One of the reforms of the Thatcher era was shifting council housing to an ownership model–transferring title to tenants, and then letting them decide to stay, or to sell the property to others.  The St. Andrews study shows that the shift to the ownership model actually reinforced the concentration of poverty, as owners of former council houses in desirable, low-pollution neighborhoods sold them to higher income households. Meanwhile, council housing in formerly polluted, and chronically impoverished neighborhoods weren’t so attractive to higher income households, and so remained in the hands of lower income families. While the initial owners of the Council housing benefited financially from being able to sell their appreciated homes, the formerly affordable housing was no longer available to other families of modest means, and as a result, these neighborhoods became more economically homogeneous.  As the authors conclude:

While the original intent of Thatcher’s policy was to reduce inequality by providing a route for working class households to step on the housing ladder, its consequence appears to have been to lengthen the shadow of the Industrial Revolution and set back the slow decay of neighborhood sorting. Our estimates suggest that about 20% of the remaining gradient between polluted and spared neighborhoods can be attributed to this reform.

The St. Andrews study is an eclectic and clever combination of history and economics. The authors have pioneered some fascinating techniques for digitized historical data, had shed additional light on the tipping point dynamics, and even managed to include references to the evolution of moths in response to coal pollution. It’s well worth a read.

Editor’s Note:  Thanks to Daniel Kay Hertz for flagging Carlos Villereal’s New York City study.