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Drs. Muth And Mills Meet Dr. Tiebout: Integrating Location-Specific Amenities Into Multi-Community Equilibrium Models

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  • Dennis Epple
  • Brett Gordon
  • Holger Sieg

Abstract

We consider the problem of integrating spatial amenities into locational equilibrium models with multiple jurisdictions. We provide sufficient conditions under which models that assume a single housing price in each community continue to apply in the presence of location-specific amenities that vary both within and across communities. If these conditions are satisfied, the models, estimation methods, and results in Epple and Sieg (1999) are valid in the presence of (potentially unobserved) location-specific amenities. We also show how to construct sufficient statistics that capture location specific spatial heterogeneity. We apply these techniques using data from the Pittsburgh metropolitan area. We find that these amenity measures capture proximity to important local employment centers as well as heterogeneity in school quality within a given school district. Copyright (c) 2009, Wiley Periodicals, Inc.

Suggested Citation

  • Dennis Epple & Brett Gordon & Holger Sieg, 2010. "Drs. Muth And Mills Meet Dr. Tiebout: Integrating Location-Specific Amenities Into Multi-Community Equilibrium Models," Journal of Regional Science, Wiley Blackwell, vol. 50(1), pages 381-400.
  • Handle: RePEc:bla:jregsc:v:50:y:2010:i:1:p:381-400
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    References listed on IDEAS

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    Cited by:

    1. Yannis M. Ioannides & Giorgio Topa, 2010. "Neighborhood Effects: Accomplishments And Looking Beyond Them," Journal of Regional Science, Wiley Blackwell, vol. 50(1), pages 343-362.
    2. Eric A. Hanushek & Kuzey Yilmaz, 2010. "Household Location and Schools in Metropolitan Areas with Heterogeneous Suburbs; Tiebout, Alonso, and Government Policy," NBER Working Papers 15915, National Bureau of Economic Research, Inc.
    3. Brülhart, Marius & Bucovetsky, Sam & Schmidheiny, Kurt, 2015. "Taxes in Cities," Handbook of Regional and Urban Economics, Elsevier.
    4. Carl Gaigne & Hans R.A. Koster & Fabien Moizeau & Jacques-Francois Thisse, 2017. "Amenities and the Social Structure of Cities," HSE Working papers WP BRP 162/EC/2017, National Research University Higher School of Economics.
    5. repec:eee:regeco:v:65:y:2017:i:c:p:104-115 is not listed on IDEAS
    6. Magliocca, Nicholas & McConnell, Virginia & Walls, Margaret, 2015. "Exploring sprawl: Results from an economic agent-based model of land and housing markets," Ecological Economics, Elsevier, vol. 113(C), pages 114-125.
    7. Holmes, Thomas J. & Sieg, Holger, 2015. "Structural Estimation in Urban Economics," Handbook of Regional and Urban Economics, Elsevier.
    8. Dennis Epple & Michael Peress & Holger Sieg, 2010. "Identification and Semiparametric Estimation of Equilibrium Models of Local Jurisdictions," American Economic Journal: Microeconomics, American Economic Association, vol. 2(4), pages 195-220, November.
    9. repec:spr:masfgc:v:23:y:2018:i:2:d:10.1007_s11027-015-9667-7 is not listed on IDEAS
    10. repec:eee:regeco:v:64:y:2017:i:c:p:12-29 is not listed on IDEAS
    11. Duranton, Gilles & Puga, Diego, 2015. "Urban Land Use," Handbook of Regional and Urban Economics, Elsevier.
    12. Elena G. Irwin, 2010. "New Directions For Urban Economic Models Of Land Use Change: Incorporating Spatial Dynamics And Heterogeneity," Journal of Regional Science, Wiley Blackwell, vol. 50(1), pages 65-91.

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