Status discrepancy as a driver of residential mobility: Evidence from Oslo

Abstract

Planners have long advocated for “social mix” in neighborhoods without clear evidence that such mixing is stable over time. Indeed, if some groups perceive an intolerable discrepancy between their own economic status and that of their neighbors they may be leave the neighborhood, thereby frustrating planners’ goals. We conduct a longitudinal analysis of Oslo household intra-metropolitan residential mobility employing a panel model with fixed effects for both households and neighborhoods and interactions for status groups, which provides estimates of plausibly causal effects. We theoretically and empirically identify two dimensions of intra-neighborhood status discrepancy that prove important predictors of leaving a neighborhood, though impacts differ strongly depending on household income status as defined by Oslo-wide standards. More extreme relative standing above the neighborhood median income promotes exit (especially for low- and middle-status households), suggesting a status signaling motive. For high-status households, being below the median neighborhood income proves influential for out-mobility, suggesting a relative deprivation motive. The overall status composition of the neighborhood is a powerful mobility influence for both low- and high-status households, suggesting a strong preference for homophily. Results imply that policy-generated introduction of low-status households will encourage the exit of high- and, to a lesser degree, middle-status neighbors.