Using Yelp to Predict Gentrification

Laura Bliss reports:

In a new working paper published by the National Bureau of Economic Research, the Harvard economists Edward Glaeser, Michael Luca, and Hyunjin Kim show how Yelp data can be used to quantify and track neighborhood change, putting a hard spine on what can otherwise be a soft science. 

Bliss explains the methodology of the research, before revealing its key findings for zip codes around the United States. Yelp listings reveal connections between the arrival of Starbucks and other artisanal coffee shops and impending increases in the cost of housing. "More broadly, they found that housing prices grew in tandem with the entry of new restaurants, bars, hair salons, convenience stores, and supermarkets," according to Bliss.

In New York City, the researchers used Yelp listings to glean changes in demographics, specifically education level, age, and race. "Fascinatingly, different listing types were more correlated with different demographics than others as they increased within Big Apple neighborhoods," explains Bliss. "Grocery stores were more strongly associated with demographics than any other listing type—the greater the change in grocery stores in a neighborhood, the greater the change in college-educated white people ages 25-34…"

The article also supplements the discussion of the recent study with links to previous research and resources that can help track the rise of gentrification where it's occurring or about to occur.