Sorting Based on Urban Heritage and Income: Evidence from the Amsterdam Metropolitan Area

Tinbergen Institute Discussion Paper 15-030/VIII

41 Pages Posted: 3 Mar 2015 Last revised: 24 Mar 2018

See all articles by Mark van Duijn

Mark van Duijn

University of Groningen, Faculty of Spatial Sciences, Department of Economic Geography and Population Research Centre

Jan Rouwendal

VU University Amsterdam - Department of Spatial Economics; Tinbergen Institute

Date Written: March 19, 2018

Abstract

Urban heritage is often concentrated in conservation areas with a protected status. Previous research argues that urban heritage attracts especially higher educated households who are likely to have higher incomes. The presence of these households may have a further impact on the attractiveness of the neighborhoods concerned, for instance through endogenous amenities like better shops or schools. If this is the case for high income households, conservation areas will have a further impact on the area’s attractiveness through the demographic composition of the residential area. In this paper we investigate the interaction between the preference for urban heritage – as an exogenous amenity – and the preference for areas with a high concentration of high income households – as an endogenous amenity. We develop a logit-based sorting model in which different income groups interact and estimate it for the Amsterdam metropolitan area. Results show that all employed households highly value conservation areas and prefer to live in areas with a high concentration of high income households. We investigate the impact of urban heritage on house prices and welfare through counterfactual simulations. The disappearance of urban heritage would result in a substantially more suburbanized location pattern of the high income households in the Amsterdam metropolitan area, and to lower welfare for all income groups.

Keywords: Location choice, urban heritage, sorting models, discrete choice, heterogeneous household preferences, welfare analysis

JEL Classification: R2, J1, Z1

Suggested Citation

van Duijn, Mark and Rouwendal, Jan, Sorting Based on Urban Heritage and Income: Evidence from the Amsterdam Metropolitan Area (March 19, 2018). Tinbergen Institute Discussion Paper 15-030/VIII, Available at SSRN: https://ssrn.com/abstract=2572198 or http://dx.doi.org/10.2139/ssrn.2572198

Mark Van Duijn (Contact Author)

University of Groningen, Faculty of Spatial Sciences, Department of Economic Geography and Population Research Centre ( email )

P.O. Box 800
Groningen, 9700 AV
Netherlands

Jan Rouwendal

VU University Amsterdam - Department of Spatial Economics ( email )

De Boelelaan 1105
1081HV Amsterdam
Netherlands

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

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