Neighborhood effects: evidence from wartime destruction in London

Redding, Stephen J. and Sturm, Daniel ORCID: 0000-0001-6408-8089 (2024) Neighborhood effects: evidence from wartime destruction in London. CEP Discussion Papers (CEPDP1986). London School of Economics and Political Science. Centre for Economic Performance, London, UK.

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Abstract

We use the German bombing of London during the Second World War as an exogenous source of variation to provide evidence on neighborhood effects. We construct a newly-digitized dataset at the level of individual buildings on wartime destruction, property values, and socioeconomic composition in London before and after the Second World War. We develop a quantitative spatial model, in which heterogeneous groups of individuals endogenously sort across locations in response to differences in natural advantages, wartime destruction and neighborhood effects. We find substantial and highly localized neighborhood effects, which magnify the direct impact of wartime destruction, and make a substantial contribution to observed patterns of spatial sorting across locations.

Item Type:	Monograph (Discussion Paper)
Official URL:	https://cep.lse.ac.uk/_new/publications/discussion...
Additional Information:	© 2024 The Author(s)
Divisions:	Economics
Subjects:	H Social Sciences > HC Economic History and Conditions D History General and Old World > D History (General) > D731 World War II
JEL classification:	F - International Economics > F1 - Trade > F16 - Trade and Labor Market Interactions N - Economic History > N9 - Regional and Urban History R - Urban, Rural, and Regional Economics > R2 - Household Analysis > R23 - Regional Migration; Regional Labor Markets; Population
Date Deposited:	10 Feb 2025 15:48
Last Modified:	01 Mar 2025 04:27
URI:	http://eprints.lse.ac.uk/id/eprint/126825

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