Given accumulating empirical and theoretical evidence on the consequences of community sorting, understanding neighborhood evolution appears to be an important but understudied component of this literature. Therefore, this paper reports descriptive findings on census tract dynamics in the United States between 1970 and 1990. The empirical vector autorgression techniques allow a more complete description of important systematic facts about neighborhood race, income and housing dynamics. A number of insights about neighborhood evolution emerge. First, tract racial composition is extremely persistent.
Tract income is persistent as well, especially at the high end of the income distribution.
Taken together, the overwhelming amount of evidence suggests racial and income sorting are independent of each other. Third, there are differences, but notably a striking amount of homogeneity, in the evolution of neighborhoods. With respect to race and income dynamics, the cumulative effect of shocks are ordered in a monotonic way. In fact, the size of the county effect is not trivial. Furthermore, there appears to be some heterogeneity in these county spillover effects.