This chapter discusses the assumptions underlying the effects of poor neighborhoods, W. J. Wilson text serves as an example. It describes the propositions underlying the hypothesized neighborhood effects are discussed. The chapter reviews the empirical evidence on neighborhood effects in general and more specifically on the impact of poverty. It provides some of the available empirical evidence for the assumption in general and the stated propositions in particular. Evidence contrary to the basic neighborhood-impact proposition comes from a study of Yugoslav and Turkish guestworkers of the first and second generation in several German cities. The question of neighborhood effects is not only a scholarly one but as well of interest for urban planners seeking adequate programs to fight poverty on the neighborhood level and to prevent a spiral of decline. A consistent finding of many studies is the spatial distribution of poverty neighborhoods in urban space.