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Driving to opportunity: Local rents, wages, commuting, and sub-metropolitan quality of life

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  • Albouy, David
  • Lue, Bert

Abstract

We examine variation in local rents, wage levels, commuting costs, household characteristics, and amenities within metropolitan areas, for 2071 areas covering the United States, by density and central-city status. We demonstrate the sensibility of estimating wage levels by workplace, not residence, and recover decentralized rent gradients that fall with commuting costs. We construct and map a willingness-to-pay index, which indicates the quality of life typical households receive from local amenities when households are similar, mobile, and informed. This index varies considerably within metros, and is typically high in areas that are dense, suburban, sunny, mild, safe, entertaining, and have elevated school-funding.

Suggested Citation

  • Albouy, David & Lue, Bert, 2015. "Driving to opportunity: Local rents, wages, commuting, and sub-metropolitan quality of life," Journal of Urban Economics, Elsevier, vol. 89(C), pages 74-92.
  • Handle: RePEc:eee:juecon:v:89:y:2015:i:c:p:74-92
    DOI: 10.1016/j.jue.2015.03.003
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    More about this item

    Keywords

    Quality of life; Commuting costs; Rent gradients; Wage gradients; Residential sorting; Amenities;
    All these keywords.

    JEL classification:

    • H4 - Public Economics - - Publicly Provided Goods
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics

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