Beautiful City: Leisure Amenities and Urban Growth

63 Pages Posted: 7 Oct 2008 Last revised: 13 Sep 2014

Gerald A. Carlino

Federal Reserve Bank of Philadelphia

Albert Saiz

University of Pennsylvania - The Wharton School; IZA Institute of Labor Economics

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Date Written: December 6, 2008

Abstract

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.

Keywords: Internal migration, amenities, urban population growth

JEL Classification: J11, J61, R23

Suggested Citation

Carlino, Gerald A. and Saiz, Albert, Beautiful City: Leisure Amenities and Urban Growth (December 6, 2008). FRB of Philadelphia Working Paper No. 08-22. Available at SSRN: https://ssrn.com/abstract=1280157 or http://dx.doi.org/10.2139/ssrn.1280157

Gerald A. Carlino (Contact Author)

Federal Reserve Bank of Philadelphia ( email )

Ten Independence Mall
Philadelphia, PA 19106-1574
United States
215-574-6434 (Phone)
215-574-4364 (Fax)

Albert Saiz

University of Pennsylvania - The Wharton School ( email )

314 Lauder-Fischer Hall
256 South Street
Philadelphia, PA 19104-6330
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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