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Consumption Amenities and City Population Density By Jordan Rappaport |
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Abstract
Population density varies widely among U.S. metro areas. A simple, static general equilibrium model demonstrates that moderate differences in metro areas’ consumption amenities can cause extremely large differences in their population density. Such amenities are more strongly capitalized into housing prices than into wages. Empirical results suggest that amenities do indeed help to support high density levels and that amenities are becoming a more important determinant of where people choose to live. Matching the empirical correlation between wages and density requires that amenities cause approximately one fifth of the cross-sectional variation in metro population density. Keywords: Population density, consumption amenities, quality of life, productivity, urban agglomeration JEL classification: R00, J00, I31 Back to top RWP home |