Inequality, Left and Right
In our work at Fourth Economy, we focus on helping communities to identify and counteract inequality in its various forms. Therefore, we often find ourselves working in areas of proximate extremes — where two or more nearby areas present stark differences in concentrations of wealth, demographics, or economic activity.
That we live in a land of pronounced inequality cannot be news to many of you. Economists, politicians, and social commentators of all stripes have, in various ways, been drawing greater attention to issues of inequality for years, and especially during the last decade.
to what extent does your ZIP Code determine your destiny?
In one of the most read and cited academic papers published in that time, the uncommonly-famous-for-an-economist economist Raj Chetty and his colleagues discussed the declining “American Dream” by exploring the variation in income mobility across the US. That landmark work generated enormous research momentum, leading to other work such as this Brookings Report, and today Opportunity Insights (Chetty’s current organization) is just one of a number of groups studying inequality across the US.
One particularly memorable turn of phrase has come to embody the question at the heart of this work: to what extent does your ZIP Code determine your destiny?
Generally, studies that have sought to analyze place-based inequality have looked at the divergence between different cities or regions — Minnesota, for instance, versus Mississippi. But, as Dr. Chetty has pointed out, disparity is often a highly local phenomenon.
That’s certainly true in the city where I live, Pittsburgh, and it’s true in many places around the country. But, I wonder, where is it most true? And that brings me to the point of this blog post. I’m going to pose, and attempt to answer, a simple question: where in the US are the two most unequal neighboring ZIP Codes?
Take some time to consider your guess...
While you do, let me clarify a few points. In order to answer this question, I’ll explore data for all ZIP Code Tabulation Areas in the fifty US states and the District of Columbia.
For each ZIP Code area, I’ll look at the median household income as reported by the American Community Survey (ACS), based on estimates from 2014-2018.
Because ACS data come from sample surveys, I will exclude more sparsely populated ZIP Code areas with fewer than 200 households, to avoid estimates with high margins of error. (This leaves 26,305 ZIP Code areas for which data are available.)
I will consider any ZIP Codes that share any point on their borders to be neighbors.