Politicians' neighbourhoods: Where do they live and does it matter?

This paper studies the political economy of local politicians' neighborhoods. We use detailed population-wide data on the location of politicians' and citizens' homes and their socioeconomic traits. We combine this information with neighborhood level data on building permits and proposals to close schools. A descriptive analysis uncovers that politicians live in neighborhoods with more socio-economically advantaged people and more of their own party’s voters. Next, we analyze whether having politicians in a neighborhood reduces the likelihood that local public “bads†are placed there. This analysis compares home neighborhoods for politicians with different degrees of political power (ruling majority or opposition) and where power was won in a close elections. We find negative effects on approved building permits for multifamily homes and proposals to close schools. This result is most likely explained by undue favoritism. We conclude that local politicians live in advantaged neighborhoods that they shield from local public bads.