Would you pay an extra $98 a month to live in a neighborhood that has 10 percent more households like your own? If you are black, you may, according to a new study published in the Journal of Political Economy examining the roles that race and educational level play in self-segregation.

 

Just as blacks are willing to pay more to live among fellow blacks, college-educated individuals are likely to pay $58 more per month to live in a neighborhood with 10 percent more college-educated households.

 

"Economists have long been interested in estimating household preferences for school and neighborhood attributes, given their relevance to many central issues in applied economics," write Patrick Bayer (Duke University and NBER), Fernando Ferreira (University of Pennsylvania), and Robert McMillan (University of Toronto and NBER) in the report.

 

Neighborhoods with more educated inhabitants and higher household incomes are more likely to pay for better schools. "Our estimates suggest that the improvement in a school's quality would disproportionately attract more highly educated households to the neighborhood, in turn making the neighborhood even more attractive to higher-income, highly educated households, and raising prices further," the authors explain.

The findings negate the popular and politically correct notion that diversity contributes to a neighborhood’s value, and there is prior research stating that multiculturalism doesn’t enhance tolerance, but creates more isolation and mistrust, at least in the short-term.

This summer Harvard professor and political scientist Dr. Robert D. Putnam released controversial results of his work examining the effects of diversity on the community. The research paper, entitled “E Pluribus Unum: Diversity and Community in the Twenty-first Century,” questions Gordon Allport’s popular “contact theory” which stated that the more contact between different ethnic groups, the more acceptance would prevail. Rather, Putnam points out, empirical data generally supports the “conflict theory” which states that the presence of the “other” encourages in-group solidarity, and out-group distrust, due to, among many factors, “contention over limited resources.”

However, this is does not mean that diversity itself causes conflict. “Diversity does not produce ‘bad race relations’ or ethnically-defined group hostility...Rather, inhabitants of diverse communities tend to withdraw from collective life, to distrust their neighbours, regardless of the colour of their skin, to withdraw even from close friends, to expect the worst from their community and its leaders, to volunteer less, give less to charity and work on community projects less often, to register to vote less, to agitate for social reform more, but have less faith that they can actually make a difference, and to huddle unhappily in front of the television. Diversity, at least in the short run, seems to bring out the turtle in all of us.”  

And Putnam means all of us. According to his research, which spanned 41 U.S. communities and included detailed interviews with over 30,000 people, no group is immune from the initial compulsion to isolate, or demonstrate what Putnam calls “hunkering” in the face of the unfamiliar.

“Does the relationship between diversity and sociability vary between men and women, upscale and downscale neighbourhoods, liberals and conservatives, whites and non-whites, young people and older generations? The short answer is basically ‘no’. The same pattern appears within each of these demographic groups…Diversity seems to affect men and women equally, though with minor variation across different indicators of sociability. The impact of diversity on sociability seems somewhat greater among conservatives, but it is significant among liberals, too. The impact of diversity is definitely greater among whites, but is visible as well among non-whites.”

 

The stereotype of the bigoted old and open-mined young? Forget it. “Americans raised in the 1970s seem fully as unnerved by diversity as those raised in the 1920s.”

 

Though diversity may be daunting at first, social advancements make way over time. Citing the American love of pizza, Jewish humour, and the Americanization of St. Patrick's Day, Putnam writes that although hunkering was most likely prevalent in the beginnings of immigration waves to New York, “In some ways ‘they’ became like ‘us’, and in some ways our new ‘us’ incorporated ‘them’. This was no simple, inevitable, friction-less ‘straight-line’ assimilation, but over several generations the initial ethnic differences became muted and less salient.”  

 

The bottom line? People prefer to live among their own kind, but over the long-term, society strengthens as immigrants contribute to the workforce, assimilate, and their children become friends. As Putman puts it, “Fifty years later, the grandchildren of the WASPs and of the immigrants were comfortable in one another's presence.”