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The Rising Value of Time and the Origin of Urban Gentrification

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  • Yichen Su

Abstract

In recent decades, gentrification has transformed American central city neighborhoods. I estimate a spatial equilibrium model to show that the rising value of high-skilled workers? time contributes to the gentrification of American central cities. I show that the increasing value of time raises the cost of commuting and exogenously increases the demand for central locations by high-skilled workers. While change in the value of time has a modest direct effect on gentrification of central cities, the effect is substantially magnified by endogenous amenity improvement driven by the changes in local skill mix.

Suggested Citation

  • Yichen Su, 2019. "The Rising Value of Time and the Origin of Urban Gentrification," Working Papers 1913, Federal Reserve Bank of Dallas.
  • Handle: RePEc:fip:feddwp:1913
    DOI: 10.24149/wp1913
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    File URL: https://www.dallasfed.org/-/media/documents/research/papers/2019/wp1913.pdf
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    References listed on IDEAS

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    1. Holian, Matthew J. & Kahn, Matthew E., 2015. "Household carbon emissions from driving and center city quality of life," Ecological Economics, Elsevier, vol. 116(C), pages 362-368.
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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. Baum-Snow, Nathaniel & Hartley, Daniel, 2020. "Accounting for central neighborhood change, 1980–2010," Journal of Urban Economics, Elsevier, vol. 117(C).
    3. Nicholas Buchholz & Laura Doval & Jakub Kastl & Filip Matějka & Tobias Salz, 2020. "The Value of Time: Evidence From Auctioned Cab Rides," NBER Working Papers 27087, National Bureau of Economic Research, Inc.
    4. 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.

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    More about this item

    Keywords

    Gentrification; Value of time; Amenities; Central cities;

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies

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