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Second-Hand Gentrification: Theory and Evidence from High-Speed Rail Extensions

Author

Listed:
  • Gabriel Loumeau

    (Department of Spatial Economics, VU Amsterdam, The Netherlands.)

  • Antonio Russo

    (Department of Economics, University of Sheffield, Sheffield S1 4DT, UK.)

Abstract

Does gentrification spread along intercity transport connections? We consider a model with heterogeneous individuals populating a primary and a secondary city. By reducing intercity commuting costs, transport connections induce mi- gration of skilled individuals towards the secondary city, which increases housing prices. We call this effect second-hand gentrification. We confirm these predictions using the 2017 expansion of the French HSR network from Paris to Bordeaux and Rennes. We find that the HSR connection induced skilled Parisians to move to Bordeaux and Rennes. Housing prices there consequently increased (+10.6%), as well as the median income (+2.5%), and within-neighborhood income inequality (+2%).

Suggested Citation

  • Gabriel Loumeau & Antonio Russo, 2023. "Second-Hand Gentrification: Theory and Evidence from High-Speed Rail Extensions," Working Papers 2023011, The University of Sheffield, Department of Economics.
    • Handle: RePEc:shf:wpaper:2023011
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    File URL: https://www.sheffield.ac.uk/economics/research/serps
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    JEL classification:

    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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