Residential Segregation, inequality, and mobility. A study case from Tromsø

Abstract

Income inequality and residential segregation are growing concerns in European capitals, including Norway, with potential negative societal implications. Income inequalities are increasing in Tromsø, while residential segregation regarding income groups seems to decrease. This study aims to investigate the likelihood of individuals relocating to neighborhoods with similar income levels, drawing upon the framework of the agent-based Schelling Model. The research employs a probit model and an outcome model based on Heckman's Two-step model. This study contributes to the understanding of the factors shaping residential choices and their impact on income-based segregation. By incorporating agent-based modeling and econometric techniques, it offers insights into the decision-making processes that influence neighborhood selection. Several models were tested. The model which fits the data the most was model with a similar income of ±30% range, around the same as the Schelling model found to be a critical threshold. The findings indicate a positive relationship between increased income and the likelihood of relocation, as observed in both the probit equation, which examines individuals' decision to move, and the outcome equation, which identifies the variables influencing the choice of a neighborhood with similar income. If income increase significantly enough, will reduce the probability to move to a neighborhood with similar income. Change in income inequality and house prices have a negative relationship with the dependent variables.