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Segregation and Polarization in Urban Brazil

Why are some cities much more well-endowed in public goods than others? Alice Xu, PhD candidate in the Department of Government at Harvard, argues that the degree of socioeconomic segregation largely explains the formation of preferences for public goods. Socioeconomically integrated (non-segregated) cities have a higher incidence of the negative spatial externalities of inequality (e.g., crime, contamination) that spill over from impoverished localities. Such neighborhood effects, in turn, increase the neighboring middle-class' preferences for certain public goods that address them, while decreasing the perceived relative efficacy of private solutions (e.g., private guards). Thus, socioeconomic integration --through the spatial externalities mechanism-- enables preference convergence on the public provision of services in place of private options. In contrast, segregation polarizes the urban electorate along class lines. To test the argument, Xu proposes a novel instrument for segregation that interacts rural-to-urban predicted migration (shift-share instrument) of the poor with the destination locality's "urban form." Xu combines this quasi-experimental strategy with census area-level measures of class- and race-based segregation and an original face-to-face survey with over 4,000 households across 408 of the 456 census areas in the megacity of São Paulo, Brazil. Using embedded mechanism experiments, Xu shows that the spatial externalities mechanism is empirically distinct from alternative mechanisms --racial prejudice, social affinity, contact hypothesis-- proposed in the literature.

Nov 11, 2020 12:00 PM in Eastern Time (US and Canada)