The Social Costs of Concentrated Poverty: Externalities to Neighboring Households and Property Owners and the Dynamics of Decline

George Galster, Jackie Cutsinger, Ron Malega

RR07-4: We investigate theoretically and empirically two interrelated potential consequences of the spatial concentration of poverty: negative externalities to proximate residents (stimulation of socially harmful behaviors like crime) and property owners (reduced maintenance and, in the extreme, abandonment). Inasmuch as these consequences are capitalized into property values, we use changes in these values to make a rough estimate of the aggregate dollar costs to American society of the aforementioned externalities…