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Do the rich and poor colocate in large cities?

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  • Tabuchi, Takatoshi

Abstract

This paper focuses on colocation rather than segregation in the context of Japanese large cities. Using the time cost of commuting from traditional urban economic theory, we analyze how different income households are sorted according to the distance from the city center. By examining microdata on housing prices and rents in Tokyo metropolitan area, we find that the rich and poor tend to colocate and are sorted by income near the city center for detached-housing prices. This is predicted if the income differential is large enough. We also find that different income groups coexist in the same location for condominium prices. This is predicted if the income elasticity of demand for space is close to one and the pecuniary cost of commuting is zero.

Suggested Citation

  • Tabuchi, Takatoshi, 2019. "Do the rich and poor colocate in large cities?," Journal of Urban Economics, Elsevier, vol. 113(C).
    • Handle: RePEc:eee:juecon:v:113:y:2019:i:c:s0094119019300634
    DOI: 10.1016/j.jue.2019.103186
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    Cited by:

    1. Xu, Hangtian, 2020. "Land Price Fluctuations, Commercial-Residential Segregation, and Gentrification," MPRA Paper 98844, University Library of Munich, Germany.
    2. Tabuchi, Takatoshi, 2023. "Backward-bending labor supply and urban location," Regional Science and Urban Economics, Elsevier, vol. 102(C).
    3. Konagane, Joji & Kono, Tatsuhito, 2021. "Heterogeneous Households’ Choices of Departure Time and Residential Location in a Multiple-origin Single-destination Rail System: Market Equilibrium and the First-best Solution," MPRA Paper 108507, University Library of Munich, Germany.
    4. Kono, Tatsuhito & Tsutaki, Keisuke, 2023. "Residential Land Use and Utilities of Multiple Generations with Lifespan Perspectives and Demographic Dynamics," MPRA Paper 117595, University Library of Munich, Germany.
    5. Tabuchi, Takatoshi, 2022. "Backward-bending Labor Supply and Urban Location," MPRA Paper 114810, University Library of Munich, Germany.
    6. Domon, Shohei & Hirota, Mayu & Kono, Tatsuhito & Managi, Shunsuke & Matsuki, Yusuke, 2022. "The long-run effects of congestion tolls, carbon tax, and land use regulations on urban CO2 emissions," Regional Science and Urban Economics, Elsevier, vol. 92(C).
    7. Xu, Hangtian, 2019. "The burst of the real estate bubble as a promoter of gentrification in Tokyo and Osaka, 1980–2017," MPRA Paper 96803, University Library of Munich, Germany.
    8. Yamagishi, Atsushi, 2021. "Minimum wages and housing rents: Theory and evidence," Regional Science and Urban Economics, Elsevier, vol. 87(C).

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