Wages, Rent, Unemployment and Amenities (original) (raw)
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Wages, rents, unemployment, and the quality of life
econstor.eu, 2012
Combining a spatial equilibrium model with a search-matching unemployment model, this paper analyzes the willingness to pay for regional amenities and the regional quality of life when wages, rents, and unemployment risk compensate for local amenities and disamenities. The results are compared with those obtained from the Rosen-Roback approach. Furthermore, the paper shows that the wage curve is negatively sloped for quasi-linear utility. Specifically, the wage rate increases and the unemployment ratio decreases in response to an increase in the amenity level if the amenity is marginally more beneficial to producers than to consumers. As an illustration of the unemployment-adjusted quality-of-life measure, the quality of life in West German counties is estimated.
2014
This analysis uses intermetropolitan differences in quality of life to estimate the value that residents place on metropolitan amenities and disamenities in land and labor markets. Using individual-level data from the 1980 and 1990 Census of Popu lation and Housing merged with metropolitan-level economic, social, and environ mental factors, it estimates hedonic wage and rent equations to derive the value of amenities and disamenities for 257 metropolitan areas in the United States. Addi tionally, the extent to which capitalization of urban amenities and disamenities changes over time is examined. Results show that the valuation of the urban environ ment changes over time. Amenities appear to play a stronger role in the housing market compared to the labor market. Capitalization appears to adjust in a dynamic process resulting from disequilibrium in the marketplace and/or changes in con sumer preferences. Concern about the impact of growth on quality of life sparks debates across cit...
THE SOURCES OF URBAN DEVELOPMENT: WAGES, HOUSING AND AMENITY GAPS ACROSS AMERICAN CITIES
This paper asks whether worker utility levels – composed of wages, rents and amenities-are being equalized among American cities. Using microdata on U.S. urban workers in 1980 and 2000, little evidence of equalization is found. Comparable workers earn higher real wages in large cities, where amenities are also concentrated. Moreover, population growth between 1980 and 2000 has not been significantly different in low-and high-utility cities, suggesting that other forces are at work shaping the sorting processes that match workers and firms. We outline an alternative view of the drivers of change in the American urban system, and urban development more generally, by applying theory from economic geography.
Amenities and urban residential structure: An amenity-embedded model of residential choice*
Papers in Regional Science, 2005
The basic model of residential choice, which has been established by generalizing Von Thünen's concept to an urban context, states that the equilibrium structure of residential land use is determined by the trade-off between accessibility and space. The willingness to sacrifice space for accessibility differs between households and depends on household income. The equilibrium land use is the outcome of the interplay between the income elasticity of space consumption and the income elasticity of commuting outlays. The primary purpose of this article is to extend the basic model by incorporating a location-dependent quality of the environment. The proposed model examines the locational consequences of household choice as influenced by a complicated interplay among three factors: the income elasticity of housing demand, the income elasticity of commuting costs, and the location-dependent amenity schedule. The equilibrium land use is contrasted for two types of cities: the case 1 city in which the level of amenities increases toward the urban fringe, and the case 2 city in which the level of amenities is assumed to decrease as one moves toward the urban fringe.
Valuation of Metropolitan Quality of Life in Wages and Rents
2000
This analysis uses intermetropolitan differences in quality of life to estimate the value that residents place on metropolitan amenities and disamenities in land and labor markets. Using individual-level data from the 1980 and 1990 Census of Popu lation and Housing merged with metropolitan-level economic, social, and environ mental factors, it estimates hedonic wage and rent equations to derive the value
Do Urban Amenities Drive Housing Rent?
2014
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 of 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.
Amenities, Affordability, and Housing Vouchers
SSRN Electronic Journal, 2018
We are grateful to the editor, Ed Coulson, and two anonymous referees for detailed guidance and valuable comments on earlier drafts of this paper. Several colleagues have provided helpful input on this research, including, without implicating, Lan Deng, Jonathan Levine, Kirk McClure, and participants at seminar and conference presentations at the Annual Meetings of the Association of Collegiate Schools of Planning, the Regional Science Association International, the Urban Affairs Associations, and the Urban Economics Association. We thank Natalia Kolesnikova for providing us with MSA-level return to education estimates. An earlier version of this paper circulated under the title "Housing Affordability with Local Wage and Price Variation." Bieri also acknowledges financial support from the University of Michigan's Graham Institute on Environmental Sustainability. The usual disclaimers apply.
Amenities and Fringe Benefits: Omitted Variable Bias
American Journal of Economics and Sociology, 1999
If labor is fairly mobile, as it is in the United States, one would expect that households would move from less desirable areas toward more desirable areas until all areas are equally desirable. The way that areas become equally desirable is through the impact of movers on wages and rents (and possibly "endogenous" disamenities, such as congestion or pollution). That is, as people move to desirable areas, they will increase the demand for land (raising rents) and increase the supply of labor (lowering wages); in equilibrium, the wage and rent "compensation" for the niceness of an area reveals, in dollar terms, just how nice the area is. Blomquist, Berger, and Hoehn 1988 demonstrated the empirical importance of such amenity compensation in estimates of the "quality-of-life" in urban areas. However, those authors were unable to include fringe benefits, which are about 40 percent of explicit wage payments, in their wage compensation. This matters greatly as amenities are seen here to be even more important than previously thought and the regional implications are pronounced, with the West and Southeast looking "better" when fringe benefits are included and the East North Central and Northeast looking substantially "worse."
Household expenditures, wages, rents
Review of Economic Dynamics, 2011
We provide new evidence from the 1980, 1990, and 2000 Decennial Census of Housing that the expenditure share on housing is constant over time and across U.S. metropolitan areas (MSA). Consistent with this observation, we consider a basic model in which identical households with Cobb-Douglas preferences for housing and numeraire consumption choose an MSA in which to live and MSAs differ with respect to income earned by residents. We compute constant-quality wages and rental prices for a sample of 50 U.S. MSAs. Given estimated wages, the calibrated model predicts that rental prices should be more dispersed than observed. That is, the model suggests that rental prices are too low in many high-wage MSAs in the year 2000. * We thank Abstract: We provide new evidence from the 1980, 1990, and 2000 Decennial Census of Housing that the expenditure share on housing is constant over time and across U.S. metropolitan areas (MSA). Consistent with this observation, we consider a basic model in which identical households with Cobb-Douglas preferences for housing and numeraire consumption choose an MSA in which to live and MSAs differ with respect to income earned by residents. We compute constant-quality wages and rental prices for a sample of 50 U.S. MSAs. Given estimated wages, the calibrated model predicts that rental prices should be more dispersed than observed. That is, the model suggests that rental prices are too low in many high-wage MSAs in the year 2000.