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Segregation and Inequality in Public Goods

October 2015

Jessica Trounstine


This article investigates disparities in public goods in U.S. cities and suggests that segregation along racial lines contributes to public goods inequalities across cities. The author suggests that segregated cities are politically polarized in nature and make it less likely that whites and racial and ethnic minorities will mutually support certain expenditures and taxes, therefore driving down collective investment. The author uses election data from 1990-2010 and demographic data matched to city finance data from 1982-2007 in more than 2,600 cities and avoids endogeneity in finance data by using the number of waterways in a city. The author finds that segregated municipalities spend less on a wide range of public goods and finds that public goods are segregated along racial lines because racial and ethnic minorities are more likely to live in communities that are residentially segregated.

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Policy Implications

This article could be useful in evaluating the allocation of monies to public goods spending including taxation and expenditures. Segregated cities are more racially polarized in elections and may be less likely to generate policy consensus, resulting in smaller public goods budgets in cities with greater segregation. This article shows that whites are segregated from racial and ethnic minorities within cities and across city lines; therefore access to public goods is segregated along racial lines, making these goods inherently unequal.

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