A wide range of social, economic, and health behaviors-such as school dropout, crime, injury, drug use, teen fertility, and obesity-vary dramatically across neighborhoods in America. People who stay in school, or avoid crime, drug use or teen fertility do so because they are willing to delay gratification, and appreciate the risks of these behaviors. The fact that these behaviors vary so dramatically across neighborhoods raises the possibility that neighborhood environments themselves may influence how people form preferences and make decisions that have important consequences for public health. A growing body of research in behavioral economics suggests plausible channels through which neighborhoods might influence elements of decision making. This project would exploit variation in neighborhood conditions generated by a unique HUD-funded randomized housing mobility experiment known as Moving to Opportunity (MTO), in order to study how neighborhood environments affect basic features of decision making and whether this is an important mechanism behind any neighborhood effects on public-health-related behaviors. Since 1994 MTO has randomly assigned some families to a program that enabled them to move to housing in less disadvantaged areas. Random assignment generates comparable groups of low-income families living in different types of neighborhoods, which can be used to overcome the selection problem that plagues most previous research and isolate the causal effects of changes in neighborhood. The long-term evaluation of MTO, currently in the field, collects a series of measures on how individuals think about choices, involving time and risk specifically, and includes an innovative choice experiment for real stakes. This proposal seeks additional funding in order to expand the scope of the analysis of the decision-making portion of the MTO survey beyond the interests or the means of the long-term MTO evaluation study. Among other goals, this project will seek to: map survey responses to preference parameters, in order to make full use of the information in the decision-making questions, improve the power of the treatment estimate, and generate generalizable results;identify the specific neighborhood characteristics that matter for decision-making outcomes in order to better understand the contingent nature of decision-making;and evaluate the effectiveness of the measures and methods used for eliciting time and risk preferences. In order to achieve these goals, this study will model and analyze preference parameters constructed based on response patterns to these survey measures, and probe the robustness of treatment effects estimated using these measures to alternative assumptions and specifications. It will employ modified models of treatment effects that exploit variation across MTO treatment groups and sites to identify the specific neighborhood conditions most responsible for any program effects. And it will perform simple validation exercises to test the effectiveness of the measures themselves.
A wide range of economic, social, and health outcomes-including public health outcomes such as injuries, obesity, and teen fertility-vary dramatically across neighborhoods within the U.S. Decisions to engage in many of these behaviors hinges on the individual's willingness to delay gratification and to defer risk. This project seeks to exploit the inclusion of a range of decision-making survey measures and even a real-stakes decision making exercise in a large-scale randomized residential-mobility experiment known as Moving to Opportunity, in order to learn more about whether neighborhood environments influence basic features of decision making, and how much of the geographic variation in social outcomes is due to a direct effect of neighborhood conditions, such as neighborhood safety, on how individuals make the type of decisions that lead to these outcomes.
