Theory suggests that it is important to consider the housing-market response to policy in terms of adjustments among housing submarkets. Defining areas as housing submarkets may be better for choosing, analyzing, and predicting the effects of revitalization policies than defining them as historically recognized neighborhoods if these neighborhoods do not reflect consumer behavior. The first key step in the submarket approach is to ascertain whether current definitions of neighborhoods adequately represent submarkets defined by consumer assessments of housing quality. This article uses the neighborhood planning of Philadelphia, Pennsylvania, to illustrate how quality-leveldefined housing submarkets compare to planners' administrative boundaries and historically recognized neighborhoods. The housing submarkets of the city diverge substantially from planner-defined geographic areas of analysis. This finding suggests that predefined neighborhoods, while valid for some purposes, do not define areas for predicting the housing-market response to policy.
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