Perceived Pollution and Residential Sorting in Germany: Income May Not Sort, But it Helps to Escape

Abstract

The disproportionate exposure of minorities and socio-economically disadvantaged households to environmental pollution is often explained by selective migration or sorting mechanisms. Yet, previous empirical findings remain inconclusive. In this study, we offer an explanation for mixed findings by focusing on the selective out-migration process triggered by environmental pollution. We use household-level panel data of the German SOEP from 1986 to 2016 and within-household estimates of correlated random effects probit models. More precisely, we test if the subjective impairment through air pollution selectively affects the probability of out-migration according to income and minority status. We find that perceived air pollution has a stronger effect on the likelihood of moving for households experiencing an income increase. Surprisingly, we find only small and imprecise differences between native German and first generation immigrant households, and a relatively large proportion of this difference can be explained by income. This indicates that selective out-migration processes substantially differ from selective in-migration processes, and environmental inequality research should more carefully distinguish the single steps of neighbourhood sorting.