Threshold effects and the expected benefits of attracting middle‐income households to the central city

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Abstract
This article looks at the two primary expected benefits of efforts to bring back, or retain, middle‐income households in the central city: (1) improved fiscal conditions caused by increasing the tax base and (2) decreased socioeconomic isolation of central‐city low‐income households. We examine the causal linkages reputed to produce these two benefits in light of the relatively limited relevant theoretical and empirical research. Although stressing that this work is only tentative and intended to be provocative, we cautiously conclude that thresholds matter. That is, it is likely that the number of middle‐income households in a given area must exceed a certain threshold for significant benefits to accrue. The geographic scale of this area, the threshold that applies, and the time needed for benefits to appear depend on the particular causal linkage at issue. In the last section, we derive implications for research and policy evaluation.