Unravelling neighbourhood change: Decomposing the effects of residential mobility and incumbent change on credit access in California

Neighbourhood change is a complex and dynamic process stemming both from macro-level changes in economic conditions and from micro-level changes in circumstances of individual residents. This article explores the intersection of these contributions to processes of neighbourhood change through the lens of changes in consumer credit access in California during the late 2010s. While improvements in consumer credit access were widespread across California neighbourhoods during this period, the specific mechanisms underlying these neighbourhood changes are found to differ in important respects. Employing credit panel data, this article identifies the distinct contributions of residential mobility and incumbent change to changes in consumer credit access at the neighbourhood scale. Descriptive and cluster analysis further reveals the types of neighbourhoods in which these mechanisms operate, highlighting the dominant role of incumbent credit score growth in neighbourhoods with moderate incomes and racially diverse populations with high rates of homeownership. The findings of this analysis point to the importance of uncovering the mechanisms underlying neighbourhood change, and indicate the existence of multiple such mechanisms facilitating the widespread expansion of access to consumer credit in California during the late 2010s.