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Do Urban Amenities Drive Housing Rent?

Author

Listed:
  • Shimizu, Chihiro
  • Yasumoto, Shinya
  • Asami, Yasushi
  • Clark, Terry Nichols

Abstract

What brought the concentration of people to certain areas? And how much are households prepared to pay in exchange for being part of such concentrations? Focusing on the Tokyo metropolitan area, which is one of the world’s largest urban areas, this paper aggregates individual data relating to urban amenities in small areas and explores its relationship to population concentration, as well as clarifying its relationship to rent (housing service prices). It is understood from the obtained results that a concentration f urban amenities produces population concentration and also raises housing rent. In addition, it is shown that when measuring the degree of amenity concentration, it is the diversity of amenities, not simply the total number of amenities that is important. Concentration of diverse amenities enhances an area’s appeal, and as a result, households will seek to reside there even if rents are high. Among the various types of amenities, it was observed that amenities such as recreational classes, educational facilities and convenience facilities such as restaurants have positive externality. On the other hand, a clear negative relationship was found between housing rent and amenities with negative externality, such as cemeteries and video arcades.

Suggested Citation

  • Shimizu, Chihiro & Yasumoto, Shinya & Asami, Yasushi & Clark, Terry Nichols, 2014. "Do Urban Amenities Drive Housing Rent?," HIT-REFINED Working Paper Series 9, Institute of Economic Research, Hitotsubashi University.
  • Handle: RePEc:hit:remfce:9
    Note: First version: July 26, 2014, This version: Aug 16, 2014
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    File URL: http://hermes-ir.lib.hit-u.ac.jp/hermes/ir/re/26840/wp009.pdf
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    References listed on IDEAS

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    1. Edward L. Glaeser, Jed Kolko, and Albert Saiz, 2001. "Consumer city," Journal of Economic Geography, Oxford University Press, vol. 1(1), pages 27-50, January.
    2. Fogel, Robert William, 2000. "The Fourth Great Awakening and the Future of Egalitarianism," University of Chicago Press Economics Books, University of Chicago Press, number 9780226256627.
    3. Shimizu, Chihiro & Nishimura, Kiyohiko G. & Watanabe, Tsutomu, 2010. "Residential rents and price rigidity: Micro structure and macro consequences," Journal of the Japanese and International Economies, Elsevier, vol. 24(2), pages 282-299, June.
    4. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    5. Dwight W. Adamson & David E. Clark & Mark D. Partridge, 2004. "Do Urban Agglomeration Effects and Household Amenities have a Skill Bias?," Journal of Regional Science, Wiley Blackwell, vol. 44(2), pages 201-224, May.
    6. Shinya Yasumoto & Andrew Jones & Chihiro Shimizu, 2014. "Longitudinal Trends in Equity of Park Accessibility in Yokohama, Japan: An Investigation into the Role of Causal Mechanisms," Environment and Planning A, , vol. 46(3), pages 682-699, March.
    7. Michael Storper & Allen J. Scott, 2009. "Rethinking human capital, creativity and urban growth," Journal of Economic Geography, Oxford University Press, vol. 9(2), pages 147-167, March.
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    Cited by:

    1. Lily Kiminami & Akira Kiminami & Shinichi Furuzawa, 2018. "Impacts of multi-functionality of urban agriculture on the CCs in Japan," Asia-Pacific Journal of Regional Science, Springer, vol. 2(2), pages 507-527, August.

    More about this item

    Keywords

    amenity concentration; population concentration; housing service prices; hedonic approach; Geographic Information System (GIS);

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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