There are many different reasons why people choose to live where they do. They like the scenery, the pay is good, it's convenient to their job, and sometimes because there are people like them and they feel more comfortable. Basically, by choosing these different things, people are choosing their neighbors and those with whom they may interact. It is unfortunate to note that in the United States there are high levels of racial and economic segregation in our cities. To measure racial segregation, something called the dissimilarity index is used. This compares the proportion of a certain ethnic group in a city with the total population of the neighborhood. To understand how this is applied please look at the Housing section of our case study on Anchorage, Alaska.
There are several reasons why people tend to segregate themselves based either on race or financial status. The first is for commuting reasons. Those who have similar jobs will choose to live similar distances from where they work. Also, Tiebout Sorting once again: people who have similar preferences for public services will choose to live in similar suburbs. For whatever reason, some people prefer to live around people very similar to themselves and will choose to locate in those areas.
To understand how two different types of households would choose to sort together consider low-income households and high-income households. There may at first be a neighborhood consisting of equal amounts of each household. To stay in the neighborhood the high-income households will be willing to pay a higher rent than the low-income households thus forcing them out as more high-income households move in until eventually all of the low-income households have moved out into a new area where there are generally just low-income households.
Families who choose neighborhoods often consider education in the area to be the biggest factor on whether they are going to live somewhere. One of the important parts of attaining an education is the people with whom the children are surrounded. The schools are often funded by taxes so those families with a higher income automatically have access to higher levels of education for their students and will generally locate in the same areas. Since the lower income neighborhoods do not have as much funding, the education received there by students is inferior to the high income neighborhoods. This contributes to more poverty and crime and creates a vicious cycle in which a family may not be able to get out of its situation.
Perhaps another factor for segregation also deals with the work-place and the available jobs. Historically, some jobs have been more readily filled by minorities due to discrimination within the workplace and the fact that they are unable to get hired elsewhere. There are many jobs that whites have had a complete monopoly in for years and thus may factor into how people arrange themselves in neighborhoods as well.
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