Natural Amenities, Neighborhood Dynamics, and Persistence in the Spatial Distribution of Income

63 Pages Posted: 12 Feb 2017  

Sanghoon Lee

University of British Columbia (UBC) - Sauder School of Business

Jeffrey Lin

Federal Reserve Banks - Federal Reserve Bank of Philadelphia

Multiple version iconThere are 2 versions of this paper

Date Written: 2017-01-30

Abstract

We present theory and evidence highlighting the role of natural amenities in neighborhood dynamics, suburbanization, and variation across cities in the persistence of the spatial distribution of income. Our model generates three predictions that we confirm using a novel database of consistent-boundary neighborhoods in U.S. metropolitan areas, 1880-2010, and spatial data for natural features such as coastlines and hills. First, persistent natural amenities anchor neighborhoods to high incomes over time. Second, naturally heterogeneous cities exhibit persistent spatial distributions of income. Third, downtown neighborhoods in coastal cities were less susceptible to the widespread decentralization of income in the mid-20th century and experienced an increase in income more quickly after 1980.

Keywords: suburbanization, gentri cation, locational fundamentals, multiple equilibria

JEL Classification: N90, O18, R23

Suggested Citation

Lee, Sanghoon and Lin, Jeffrey, Natural Amenities, Neighborhood Dynamics, and Persistence in the Spatial Distribution of Income (2017-01-30). FRB of Philadelphia Working Paper No. 17-3. Available at SSRN: https://ssrn.com/abstract=2915416

Sanghoon Lee (Contact Author)

University of British Columbia (UBC) - Sauder School of Business ( email )

2053 Main Mall
Vancouver, BC V6T 1Z2
Canada

Jeffrey Lin

Federal Reserve Banks - Federal Reserve Bank of Philadelphia ( email )

Ten Independence Mall
Philadelphia, PA 19106-1574
United States

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