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Consumption amenities and city crowdedness

  • Jordan Rappaport

Crowdedness varies widely among U.S. cities. A simple, static general equilibrium model suggests that plausible differences in metro areas’ consumption amenities can account for much of the observed variation. Under a baseline calibration, differences in amenities valued at 30 percent of average consumption expenditures suffice to support a twenty-fold difference in population density. Empirical results confirm that amenities help support crowdedness and suggest that they are becoming a more important determinant of where people choose to live. But for the moment, local productivity appears to be the more important cause of local crowdedness.

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Paper provided by Federal Reserve Bank of Kansas City in its series Research Working Paper with number RWP 06-10.

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Date of creation: 2006
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Handle: RePEc:fip:fedkrw:rwp06-10
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