Neighborhood Effects on Subjective Well-Being: Evidence from a Randomized Experiment

Jens Ludwig, University of Chicago
Greg J. Duncan, University of California, Irvine
Lisa A. Gennetian, Brookings Institution
Lawrence F. Katz, Harvard University
Ronald C. Kessler, Harvard Medical School
Jeffrey Kling, Congressional Budget Office (CBO)
Lisa Sanbonmatsu, National Bureau of Economic Research (NBER)

This study estimates the effects of randomized variation in neighborhood conditions on the subjective well-being (SWB) of low-income families using data from a large social experiment called Moving to Opportunity (MTO). Using data collected 10-15 years after randomization, we find that MTO moves from high- to lower-poverty neighborhoods increase self-reported SWB by an amount equal in size to gap in SWB between blacks and whites, or between families with annual incomes that differ by as much as $45,000. Such moves also improve mental health. Evidence suggests that MTO’s impacts on SWB is driven more by improved neighborhood safety than by improvements in housing quality or declines in neighborhood racial or economic segregation. Note: these data are embargoed until the HUD report is released, so please treat the information in this abstract and the paper as confidential.

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Presented in Session 57: Happiness and Economic and Social Well-Being