Neighborhood Price Diversity Index

The Neighborhood Price Diversity Index was developed to classify areas of a city based on the prices of shops, restaurants, and services located within them.

This data could then be used as a proxy for the economic diversity of people spending time in each area. For example, a neighborhood predominated by expensive businesses might only be inviting to people with higher incomes. Alternatively, areas that display a variety of consumer-facing businesses could invite people from a variety of economic levels to spend time and mingle.

We decided to test the Neighborhood Price Diversity Index in northern San Francisco. In the map below, cells with no color indicate that there was not enough price or business data to run the method on those areas. There are clear divisions between places that are price-diverse and places that are not. The Inner Richmond area, for example, has low price variation, while Hayes Valley and Mid-Market offer a wide range of prices.

To use this method, we overlaid a 200 x 200 meter grid on a study area. In the middle of each grid cell, we dropped a pin. Next, we used a 500-meter buffer around each point to collect the price classification of the consumer-facing business, rated $ to $$$$ by Google Places API. If the nearby businesses were all inexpensive or all expensive, the parent grid cell of the buffered point is given a low price variety score (colored green on the map above). If the nearby businesses are a mix of expensive, affordable, and moderately-priced, then the parent grid cell of that buffered point is given a high price variety score (colored brown on the map above). You can learn more about this test in The Public Life Diversity Toolkit

We recommend using this method as a “site selection tool,” applied at the beginning of an analysis to identify places that might attract people from a variety of socioeconomic backgrounds. A possible next step is to compare price variety with Census Data and Participant Survey data on who is spending time in the area. This information can give you a better sense as to how economically diverse the public life in an area is.

This tool does not have a template. If you are interested in using it in the field, we would love to hear from you.