The Daily Parker

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Tracking gentrification through Yelp

Researchers at the City University of New York have discovered that Yelp data can show rising incomes with remarkable precision:

First, in testing a popular theory about signs of the gentry’s arrival, they pulled out all the Starbucks listings on Yelp across the United States dating back to 2007. Combining that information with Federal Housing Finance Agency data by zip code, they found that the arrival of every new Starbucks into a given area was associated with a 0.5 percent rise in local housing prices. Coffee shops of all kinds—artisanal and chain—had a similar relationship.

More broadly, they found that housing prices grew in tandem with the entry of new restaurants, bars, hair salons, convenience stores, and supermarkets. Counting reviews, the Yelp data also captured commercial activity at those businesses, which turned out to be a predictor of rising home values, too.

Fascinatingly, different listing types were more correlated with different demographics than others as they increased within Big Apple neighborhoods. 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 researchers found.

Citylab caveats the data, saying, "Still poorly understood, however, is which comes first in gentrifying neighborhoods: the wealthier residents or the 'nice' amenities."

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