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Urban Population and Amenities: The Neoclassical Model of Location

Author

Listed:
  • David Albouy

    (University of Illinois and NBER)

  • Bryan Stuart

    (George Washington University)

Abstract

We develop a neoclassical general-equilibrium model to explain cross-metro variation in population, density, and land supply. We provide new methods to estimate local traded and non-traded productivities, and elasticities of housing and land supply, using density and land-area data. From wage and housing-cost indices, the model explains half of U.S. density and total population variation, and finds that quality-oflife determines population and density more than employment opportunities (tradeproductivity). Productivity and factor substitution in housing (non-traded) production matter most, but are poor in nicer areas. We show how changing quality-of-life, relaxing land-use regulations, or neutralizing federal taxes could redistribute populations massively

Suggested Citation

  • David Albouy & Bryan Stuart, 2017. "Urban Population and Amenities: The Neoclassical Model of Location," Working Papers 2017-23, The George Washington University, Institute for International Economic Policy.
    • Handle: RePEc:gwi:wpaper:2017-23
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    More about this item

    Keywords

    Population; density; quality of life; productivity; amenities; housing supply; land supply; local labor markets;
    All these keywords.

    JEL classification:

    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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