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Amenities and skill†biased agglomeration effects: Some results on Italian cities

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  • Dalmazzo, Alberto
  • de Blasio, Guido

Abstract

By exploiting the Roback model, we analyze the impact of agglomeration on both production and consumption. We postulate that the evaluation of urban amenities may vary across skill†groups. Empirically, we use the Bank of Italy's survey of household income and wealth (SHIW) dataset, and find evidence of a substantial urban rent premium, while we do not find support for an urban wage premium. We conclude that urban agglomeration is predominantly a source of positive amenities for residents and, in particular, highly†educated individuals seem to care about the welfare effects of agglomeration more than their less†educated counterparts. Survey results also suggest that urban skilled workers benefit from jobs of higher quality, and from shopping possibilities and cultural consumption opportunities, such as cinemas, theatres, and museums.

Suggested Citation

Handle: RePEc:eee:paresc:v:90:y:2011:i:3:p:503-528
DOI: 10.1111/j.1435-5957.2010.00327.x
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JEL classification:

  • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
  • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
  • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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