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    Nowcasting Gentrification: Using Yelp Data to Quantify Neighborhood Change
    05 Mar 2018Working Paper Summaries

    Nowcasting Gentrification: Using Yelp Data to Quantify Neighborhood Change

    by Edward L. Glaeser, Hyunjin Kim, and Michael Luca
    This study finds that data from digital platforms (in this case, Yelp) can help forecast which neighborhoods are gentrifying and provide new ways to measure business landscape changes that accompany demographic changes.
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    Author Abstract

    Data from digital platforms have the potential to improve our understanding of gentrification and enable new measures of how neighborhoods change in close to real time. Combining data on businesses from Yelp with data on gentrification from the Census, Federal Housing Finance Agency, and Streetscore (an algorithm using Google Streetview), we find that gentrifying neighborhoods tend to have growing numbers of local groceries, cafes, restaurants, and bars, with little evidence of crowd-out of other types of businesses. For example, the entry of a new coffee shop into a zip code in a given year is associated with a 0.5 percent increase in housing prices. Moreover, Yelp measures of local business activity provide leading indicators for housing price changes and help to forecast which neighborhoods are gentrifying.

    Paper Information

    • Full Working Paper Text
    • Working Paper Publication Date: February 2018
    • HBS Working Paper Number: HBS Working Paper #18-077
    • Faculty Unit(s): Negotiation, Organizations & Markets
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    Michael Luca
    Michael Luca
    Lee J. Styslinger III Associate Professor of Business Administration
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