Beautiful City: Leisure Amenities and Urban Growth
Gerald A. Carlino
Federal Reserve Bank of Philadelphia
University of Pennsylvania - The Wharton School; Institute for the Study of Labor (IZA)
December 6, 2008
FRB of Philadelphia Working Paper No. 08-22
Modern urban economic theory and policymakers are coming to see the provision of consumer leisure amenities as a way to attract population, especially the highly skilled and their employers. However, past studies have only provided indirect evidence of the importance of leisure amenities for urban development. In this paper we propose and validate the number of leisure trips to MSAs as a measure of consumer revealed preferences for local leisure-oriented amenities. Population and employment growth in the 1990s was about 2 percent higher in an MSA with twice as many leisure visits: the third most important predictor of recent population growth in standardized terms. Moreover, this variable does a good job at forecasting out-of-sample growth for the period 2000-2006. "Beautiful cities" disproportionally attracted highly-educated individuals, and experienced faster housing price appreciation, especially in supply-inelastic markets. Investment by local government in new public recreational areas within an MSA was positively associated with higher subsequent city attractiveness. In contrast to the generally declining trends in the American central city, neighborhoods that were close to "central recreational districts" have experienced economic growth, albeit at the cost of minority displacement.
Number of Pages in PDF File: 63
Keywords: Internal migration, amenities, urban population growth
JEL Classification: J11, J61, R23working papers series
Date posted: October 7, 2008 ; Last revised: May 15, 2012
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