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Working Paper No. 05-07

Environmental Injustice and Residential Segregation: Investigating the Link
Joshua Sidon
October 2005


Environmental Justice advocates claim that poor and minority communities are disproportionately exposed to environmental hazards. Furthermore, it is asserted that this differential exposure is primarily a product of institutional racism, both past and present, in the siting and management of environmental hazards. Therefore, much of the research into environmental injustice has concentrated on empirically investigating these claims. However, this approach implicitly rules out the possibility that differential exposure may, in part, be a consequence of the formation of communities.

A small handful of empirical papers (Been 1994, Been 1997, Mitchell 1999, Banzhaf and Walsh 2005) have explored the possibility of environmentally induced migration patterns with mixed results. However, to date, researchers have overlooked a potentially important confounding factor in this analysis – the interaction of income, preference for racial composition, and preference for environmental quality. This paper is a first attempt to merge insights from the literature on residential segregation with the possibility of environmentally driven household sorting. The research provides a theoretical analysis of the implications of these interactions. A locational equilibrium model is developed in which households have preferences over both racial composition and environmental quality.

The model is used to investigate whether the interaction between these preferences can lead households to sort in such a way that minorities, controlling for income, are disproportionately exposed to low environmental quality – even in the case where preferences for environmental quality are constant across racial groups and no discrimination is present in the market. The results demonstrate that in the presence of preferences for racial composition, it possible to support, in equilibrium, a distribution that reflects what would traditionally be labeled as environmental injustice. However, this equilibrium is supported independent of the siting of environmental hazards and independent of any form of direct discrimination. It is supported simply by the introduction of racial preferences.

The findings also suggest that the initial distribution of households (at the time of siting) may be a critical factor in explaining the currently observed distribution. Furthermore, the model and results highlight the potential significance of population proportions, neighborhood size, and number of neighborhoods within a household’s locational choice set.

JEL classification: J15, Q58, R13
Keywords: Environmental Justice, Residential Segregation, Racial Preferences, Sorting