Have amenities become relatively more important than firm productivity advantages in metropolitan areas?
AbstractWe analyze patterns of compensating differentials to determine whether a region's bundle of site characteristics has a greater net effect on household location decisions relative to firm location decisions in U.S. metropolitan areas over time. We estimate skill-adjusted wages and attribute-adjusted rents using hedonic regressions for 238 metropolitan areas in 1990 and 2000. Within the framework of the standard Roback model, we classify each metropolitan area based on whether amenities or firm productivity advantages dominate and analyze the extent to which these classifications change between 1990 and 2000. We then decompose compensating differentials into amenity and firm productivity advantage components and examine how these components change. Empirical results suggest that while the relative importance of amenities appears to have increased slightly between 1990 and 2000, firm productivity advantages continued to dominate amenities in the vast majority of metropolitan areas during this decade.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Federal Reserve Bank of New York in its series Staff Reports with number 344.
Date of creation: 2008
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-09-29 (All new papers)
- NEP-GEO-2008-09-29 (Economic Geography)
- NEP-LAB-2008-09-29 (Labour Economics)
- NEP-URE-2008-09-29 (Urban & Real Estate Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Edward L. Glaeser, Jed Kolko, and Albert Saiz, 2001.
Journal of Economic Geography,
Oxford University Press, vol. 1(1), pages 27-50, January.
- Ed Glaeser & Jed Kolko & Albert Saiz, 2000. "Consumer City," NBER Working Papers 7790, National Bureau of Economic Research, Inc.
- Edward L. Glaeser & Jed Kolko & Albert Saiz, 2000. "Consumer City," Harvard Institute of Economic Research Working Papers 1901, Harvard - Institute of Economic Research.
- Haughwout, Andrew F., 2002.
"Public infrastructure investments, productivity and welfare in fixed geographic areas,"
Journal of Public Economics,
Elsevier, vol. 83(3), pages 405-428, March.
- Andrew F. Haughwout, 2000. "Public infrastructure investments, productivity and welfare in fixed geographic areas," Staff Reports 104, Federal Reserve Bank of New York.
- Patricia E. Beeson & Randall W. Eberts, 1987.
"Identifying productivity and amenity effects in interurban wage differentials,"
8707, Federal Reserve Bank of Cleveland.
- Beeson, Patricia E & Eberts, Randall W, 1989. "Identifying Productivity and Amenity Effects in Interurban Wage Differentials," The Review of Economics and Statistics, MIT Press, vol. 71(3), pages 443-52, August.
- Jordan Rappaport, 2004.
"Moving to Nice Weather,"
Econometric Society 2004 North American Summer Meetings
188, Econometric Society.
- Stuart A. Gabriel & Joe P. Mattey & William L. Wascher, 1996.
"Compensating differentials and evolution of the quality-of-life among U.S. states,"
Working Papers in Applied Economic Theory
96-07, Federal Reserve Bank of San Francisco.
- Gabriel, Stuart A. & Mattey, Joe P. & Wascher, William L., 2003. "Compensating differentials and evolution in the quality-of-life among U.S. states," Regional Science and Urban Economics, Elsevier, vol. 33(5), pages 619-649, September.
- Roback, Jennifer, 1982. "Wages, Rents, and the Quality of Life," Journal of Political Economy, University of Chicago Press, vol. 90(6), pages 1257-78, December.
- Edward L. Glaeser & Albert Saiz, 2003.
"The Rise of the Skilled City,"
NBER Working Papers
10191, National Bureau of Economic Research, Inc.
- Edward L. Glaeser & Albert Saiz, 2003. "The Rise of the Skilled City," Harvard Institute of Economic Research Working Papers 2025, Harvard - Institute of Economic Research.
- Edward L. Glaeser & Albert Saiz, 2003. "The rise of the skilled city," Working Papers 04-2, Federal Reserve Bank of Philadelphia.
- Edward L. Glaeser & Joshua D. Gottlieb, 2006. "Urban Resurgence and the Consumer City," Harvard Institute of Economic Research Working Papers 2109, Harvard - Institute of Economic Research.
- Patricia E. Beeson & Randall W. Eberts, 1987. "Identifying amenity and productivity cities using wage and rent differentials," Economic Review, Federal Reserve Bank of Cleveland, issue Q III, pages 16-25.
- Richard B. Peiser & Lawrence B. Smith, 1985. "Homeownership Returns, Tenure Choice and Inflation," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 13(4), pages 343-360.
- Stuart A. Gabriel & Stuart S. Rosenthal, 2004. "Quality of the Business Environment Versus Quality of Life: Do Firms and Households Like the Same Cities?," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 438-444, February.
- Gyourko, Joseph & Tracy, Joseph, 1991. "The Structure of Local Public Finance and the Quality of Life," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 774-806, August.
- Edward L Glaeser & Jesse M Shapiro, 2003. "Urban Growth in the 1990s: Is City Living Back?," Journal of Regional Science, Wiley Blackwell, vol. 43(1), pages 139-165.
- David Albouy, 2009. "What Are Cities Worth? Land Rents, Local Productivity, and the Capitalization of Amenity Values," NBER Working Papers 14981, National Bureau of Economic Research, Inc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Amy Farber).
If references are entirely missing, you can add them using this form.