Segregation at the metropolitan level is part of the structure that continues to reinforce this control and perpetuate the pervasive inequality across regions (VonLockette, 2010). Overwhelmingly, the literature supports the stance that segregation has negative effects, with the majority of negative effects accruing to African Americans. Recent research has highlighted the connection between segregation and health effects, such as segregated African Americans are more likely to have low birth weight babies (Ellen, 2000), are more likely to be obese (Corral et. al., 2012), and have higher rates of hyper-tension (Kershaw et al, 2011).  Nonetheless, there are notable benefits of segregation, including the potential for increased political power among segregated minorities (Laveist, 1992; Bledsoe, et al., 1995). 

Perhaps the most compelling and disconcerting research associated with segregation comes out of the health literature, which has consistently found negative outcomes for the well-being of African Americans in segregated communities. One concept that has been associated with health outcomes, while also encompassing more global concepts of well-being is subjective well-being, or happiness. Happiness research has increasingly become validated and reliable for trend and policy studies. Yet, there has been little work on happiness and neighborhoods, and in particular segregation. The current study continues the discussion of the association between racial segregation and well-being by examining the relationship between subjective well-being and racial segregation of blacks and whites living in metropolitan regions. This work is important for several reasons. First, although there has been much work related to racial segregation and outcomes for residents, there is very little known about why these outcomes occur. Subjective well-being has the potential to connect the concepts of neighborhood preferences and health outcomes. Happiness as a more global measure of well-being might provide more insight into residents’ preferences as well as outcomes related to health, given the strong relationship between happiness and health. Second, recent neighborhood and housing policies have focused on deconcentrating poverty and designing more integrated communities. There has been much controversy surrounding these policies, in part due to the assumption that if segregation leads to negative outcomes, then integration is the best solution.

 Specifically, we look at racial segregation at the MSA level, controlling for state, neighborhood, and individual level variables, in order to understand its effect on subjective well-being. We obtained the first (1987-88) and second waves (1992-94) of National Survey of Families and Households (NSFH), and we matched individual data with 1990s census track data so that we could control for neighborhood level variables. To deal with the limitations of cross-sectional reserch, we extend the methodology to exploit the panel structure of the data and incorporate individual fixed effects.  Preliminary results indicate that blacks were less happier in more integrated metropolitan areas than in the most segregated metropolitan areas. Our paper discusses the implication of these results within the context of the current poverty deconcentration and integration policies.