Accessibility to Amenities and Urban Inequality

This paper proposes an innovative methodology to assess inequality between different urban areas. We focus on urban inequality generated by the uneven distribution of amenities. Individuals are assumed to be averse to an unequal accessibility to amenities. Individuals? inequality aversion is embedded in a social welfare function from which a parametric multidimensional index for inequality is derived. This index is composed of unidimensional inequality indices, accounting for the particular accessibility to each amenity between urban areas, plus a residual term summarising any correlation among the distribution of amenities. The main advantage of the index is that it allows to disentangle the contribution of each amenity accessibility to the overall index from the joint effect of the amenities. The residual term is also interpreted as the degree of complementarity/substituability among different amenities. The multidimensional inequality index depends on a set of parameters measuring the level of inequality aversion of citizens on each amenity. We determine the value of parameters exploiting the available information on the willingness to pay for each amenity, estimated through a hedonic model referred to the housing and labor market. The suggested methodology is illustrated through an empirical application to the main Italian cities (103 province capitals) observed over the period 2001-2010. We consider a set of amenities collected at the city level, such as educational and health services, recreational activities, public transports, economic and environmental conditions. Data on amenities were taken from public authority records. Data on housing and labor markets are provided by the Real Estate Observatory of the Agenzia del Territorio and the Italian National Social Security Institute, respectively. Housing market data refer to individual house transactions in the 103 province capitals between 2004 and 2010. In addition to housing market values, the data set provides a detailed description of structural attributes of the surveyed housing units. Labor market data refer to individual workers in the private sector of the 103 province capitals for years 2001 and 2002. The dataset provides information on annual earnings, type of occupation, full-time or part-time work status, contract length and province of work. The dataset also provides information on worker characteristics and firm characteristics.