Final Presentation for Econ 395: Treatment Effects & Casual Inference

The context of this paper is that families, primarily female headed households with children, who lived in high-poverty public housing projects in five U.S. cities, were offered housing vouchers by lottery in the Moving-to-Opportunity (MTO) program. After four to seven years, surveys were conducted to evaluate their socio-economic and health outcomes, as well as their neighbourhood environments. The authors of this paper found evidence that families who were offered such vouchers had moved to live in safer neighbourhoods of lower poverty rates. However, the outcomes differed across groups of different demographic characteristics. For instance, the authors found no statistically significant overall effects on self-sufficiency and physical health, but found substantial mental health benefits for the adults and female youth. Beneficial effects were also discovered on education, risky behaviour and physical health for the female youth, but these effects were negative for their male counterparts. In general, these outcomes were approximately negatively associated with neighbourhood poverty rates.

The shining point of this paper is that it avoids the endogenous problem which the living places resulting in individual sorting across neighbourhoods are likely to be correlated with the underlying determinants of individual outcomes. By using the randomized experiment data, the authors provide straight forward estimates of the existence, the magnitude and the direction of neighbourhood effects on health and socio-economic outcomes for adult and youth populations. Their findings also bear on key housing policy decisions such as whether it is better to provide housing subsidies tied to public housing projects or housing vouchers that can otherwise be used in the private-sector rental markets.

Slides: Experimental Analysis of Neighborhood Effects