Elite Ratiocination

Megan McArdle has a question:

Can the Rise of the Internet Explain D.C. Zoning Fights?
By Megan McArdle

Does she have an answer? She is, after all, a graduate of the Booth School at the University of Chicago, the Ivy League's University of Pennsylvania, and exclusive, expensive Riverside Day School. Let's see what hundreds of thousands of dollars of schooling taught our Megan.

DC's young gentrifiers are, even as gentrifiers go, disproportionately well-connected to the internet.

Okay, it's a theory. Let's take a look at her evidence.

Indeed, I wonder if Amazon isn't partly responsible for the pace of gentrification here. In the neighborhoods that are currently gentrifying, the retail corridors were destroyed in the 1968 riots and never really came back; it's no joke living in a neighborhood like that without a car.

Well, that's two statements: the people who are moving in to old neighborhoods are connected to the internet, and Amazon in particular is speeding up gentrification by eliminating the need for most physical stores. The evidence that supports McArdle's suppositions and wondering must be next.

Most of the affluent "new" people I know in DC are like my husband and I: they order everything they can over the internet. We don't need much in the way of brick-and-mortar retail; what we need is bars and restaurants, and maybe a salon or two. If you are not so thoroughly web-ified, you almost certainly want a much more retail-heavy commercial district.

"Everybody I know does it" is rather a small (and unverified) sample. Perhaps McArdle is just teasing us to get us to continue reading, the little scamp. The proof must be somewhere!

All of which is another way of saying that your neighbors cause externalities.

Wait a second. I must have missed something. Here is the following text:

. . . unless Amazon delivers bulky stuff to your door. Most of the affluent "new" people I know in DC are like my husband and I: they order everything they can over the internet. We don't need much in the way of brick-and-mortar retail; what we need is bars and restaurants, and maybe a salon or two. If you are not so thoroughly web-ified, you almost certainly want a much more retail-heavy commercial district. And while many of the "old DC' residents are of course on the internet and social media, many others cannot afford broadband connections, or credit cards--and given their older age skew, many others probably simply aren't that comfortable with, or interested in, shopping online.

I'd been thinking of the bar-and-restaurant complaint as a convenient shorthand, rather than something that is almost literally true: the gentrified districts in DC boast very little other than places for young people to gather and refresh themselves. Not nothing, but much less than, say, the streets I grew up on in New York.

Lots of statements, no links or numbers. Hmmmm. That's strange. It's almost as if McArdle is simply assuming that everyone else in the world is just like her, with the same needs, wants and motivations. There must be some chain of argumentation somewhere, right?

All of which is another way of saying that your neighbors cause externalities.

Strange. We have a hypothesis and conclusion, but no evidence. How can you verify a hypothesis with no data? That's crazy. You can't just state something is true because you think it is true, or it seems to be true, or that if it is true for you then it must be true for everyone else. You actually have to look at the numbers to check if your theory is true.

The corollary of that is that it is not irrational to want to control who moves in around you--or even to want to maximize the number of people who are like yourself. The more people there are like you, the more the neighborhood will suit your needs.

And here is yet another unproven conclusion based on invisible data. The only thing this paragraph proves is that McArdle wants to live in a homogeneous bubble.

I'm not saying that we should cater to this desire (in either the gentrifiers, or the gentrified). But we shouldn't act like it's necessarily crazy or evil, either.

Which provides the moral justification for pricing the neighborhood's older inhabitants out of their own neighborhood, by increasing expenses and decreasing livability for the middle class residents. But McArdle is not finished, so maybe there is hope for data after all!

* (Note: there's a another sort of argument that takes place when the neighborhood has already gentrified, and the residents band together to prevent new people from coming in to block their views and compete for free street parking spaces. But these arguments are basically pretty naked displays of self interest, so I've left them out.)

I hate to break it to the business and economics senior editor of The Atlantic, but saying that everyone else is shit out of luck because McArdle can order what she needs online is a pretty naked display of self-interest as well.  If McArdle had bothered to do any research about gentrification in DC she might have noted this:

In the District, white households raked in a median income of $99,220, while black households made $37,430 and income amongst hispanics hovered right above the city’s $60,798 median.


In “changing neighborhoods,” marked by rapid development and rising prices, the task of preserving affordable housing looms large.

Demographic changes on H Street since 2000

“The question is how do you develop in a way that allows low-income communities to stay in place,” said Derek Hyra, the author of a forthcoming book on gentrification in D.C.’s Shaw neighborhood. “Redevelopment has sought to move poverty out of the city.”

D.C. is the ninth most expensive rental market in the country, asking $1,461 for a two-bedroom apartment at fair market rate, according to the National Housing Conference, a D.C.-based research group. The group says housing is defined as “affordable” when the rent or mortgage payment does not exceed 30 percent of the tenant’s income.

A D.C. resident has to make $58,440 a year for a 2-bedroom, fair market apartment to be affordable, using this metric. A fifth of D.C. residents struggle on $22,314 or less.

The study also looks at five sectors that are hiring the most nationwide. Four of them—groundskeeper, janitor, office clerk, and security guard—have average salaries far too low to make rent, let alone home ownership, affordable in the District.

Income inequality is high in DC, as is joblessness for the poor. The population in DC is booming, and the richer inhabitants are supplanting the poorer ones, who are moving farther out from the city center. Also, not all the gentrifiers are white and  not all the people who were displaced were forced out because of income. The issue is far more interesting and complex than McArdle presents it.

But  McArdle uses Amazon to buy toilet paper, therefore Amazon is a reason her neighborhood gentrified quickly. QED! Which makes it very odd that McArdle would present her theory as a question.

What a wonderfully easy way to get rich.