Spatial income inequality in Toronto: a longitudinal study

This paper examines the trends and changes in both spatial and non-spatial income inequality in the Toronto CMA between 1985 and 2015 at various geographic scales, including both within and between neighbourhoods. Fixed effects panel regression models are used to uncover which local demographic and housing characteristics are most significant in explaining changes in inequality within neighbourhoods over time. Findings indicate that macro-scale income segregation among neighbourhoods has declined, while micro-scale intra-neighbourhood income segregation has increased since 1985. Further, compared to overall changes in income inequality in the region, neighbourhoods have become more homogenous in terms of their household income distribution. Thus, neighbourhood sorting by households based on income has increased since 1985. Consistent with extant literature, local housing characteristics have spillover effects on income segregation. Specifically, variables associated with greater housing affluence are negatively correlated with intra-neighbourhood inequality measures, and thus positively correlated with income homogenization. This confirms and adds to the literature that local land use regulations impact income spatial inequality. KEYWORDS Spatial Income Inequality; Segregation; Neighbourhoods; Toronto CMA; Fixed Effects Models; Quantitative Analysis; GIS; Housing Regulation