Abstract

http://ssrn.com/abstract=1408901
 
 

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What are Cities Worth? Land Rents, Local Productivity, and the Capitalization of Amenity Values


David Albouy


University of Michigan at Ann Arbor - Department of Economics; National Bureau of Economic Research (NBER)

May 2009

NBER Working Paper No. w14981

Abstract:     
An equilibrium model predicts that inter-city differences in firm productivity, and the full value of local amenities cannot be inferred without land values. These may be inferred from ordinary wage and housing-cost data using the housing-cost function if housing-sector productivity is constant. A calibrated model predicts how quality-of-life and production amenities are capitalized differently into land values, wages, housing costs, and federal-tax payments. The total value of these amenities are estimated across U.S. cities. Wages and housing costs are driven more by productivity than quality-of-life differences. The most productive and valuable cities are typically coastal, sunny, mild, educated and large.

Number of Pages in PDF File: 64

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Date posted: May 26, 2009  

Suggested Citation

Albouy, David, What are Cities Worth? Land Rents, Local Productivity, and the Capitalization of Amenity Values (May 2009). NBER Working Paper No. w14981. Available at SSRN: http://ssrn.com/abstract=1408901

Contact Information

David Albouy (Contact Author)
University of Michigan at Ann Arbor - Department of Economics ( email )
611 Tappan Street
Ann Arbor, MI 48109-1220
United States
National Bureau of Economic Research (NBER) ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
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