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A recent study by Harvard economist Raj Chetty has been making the rounds in the popular press this week (or at least in my heavily-curated Google news feed). Chetty’s latest work builds on his prior survey of economic mobility in America, by overlaying on top of it a map of the frequency of friendships between people of different socio-economic status (as determined by Facebook connections).
His conclusions are, on their face, powerful. The two maps look virtually identical. That is, the regions in which people hold friendships outside their immediate economic cohort are ALSO those in which a person born into poverty is most likely to climb out of it.
The NPR article linked above focuses on the microeconomic implications of this, describing a Boston gym that exclusively employs disadvantaged trainers to cater to a high-end clientele. As investors, however, our interest was piqued by the macro implications for the real estate market, especially against the current dynamic backdrop of remote work and exurban growth.
That is, economic and social mobility has historically been a large driver of why people moved to gateway city downtowns. After all, George and Weezy moved on up from Queens to Manhattan, not to New Canaan. Looking at the social mobility map, superstar cities like San Francisco, Austin, Seattle, and the northeast Megalopolis from DC to Boston are oases of blue mobility surrounded by deserts of red stagnation.