DP13296 | Gentrification and pioneer businesses

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We build a time-consistent block-level dataset from 1990 to 2010 containing socio-economic characteristics of residents and information on businesses in New York. We identify both gentrifying areas and pioneer sectors characterized by atypical location decisions. The latter—mostly cultural, recreational, and creative industries—help us to better predict and understand gentrification. We find that a block’s initial exposure to pioneers has a quantitatively sizable effect in predicting future gentrification. Pioneers foster gentrification through the types of workers they hire, their signal as to the future prospects of a neighborhood, and their effect on the arrival of consumption amenities.