Sunnier, Denser and More Productive Cities
We set out an open, monocentric city with residential structures and reflect how changes to the amenity index affect the city. On the consumption side, an amenity is represented by an exogenous boost to the utility of a resident's current commodity bundle. The city's population, land rent and footprint expand, and its density rises. We test for an amenity effect in local wages with household data for the US in 1990 and discover that city density is much stronger in explaining local premia than is the city population. We test for amenity effects in local house prices with the same data set.
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