Who Lives Where in the City? Amenities, Commuting and Income Sorting

100 Pages Posted: 21 Apr 2017 Last revised: 10 Dec 2018

See all articles by Carl Gaigne

Carl Gaigne

French National Institute for Agricultural Research (INRA) - UMR 1302 SMART

Hans Koster

Vrije Universiteit Amsterdam, School of Business and Economics

Fabien Moizeau

Université Paris I Panthéon-Sorbonne - Equipe Universitaire de Recherche en Economie Quantitative (EUREQUA)

Jacques-François Thisse

Catholic University of Louvain (UCL); Centre for Economic Policy Research (CEPR)

Date Written: April 2017

Abstract

We study the sorting of income-heterogeneous consumers within cities. We allow for non-homothetic preferences and locations that are differentiated by their distance to employment centers and accessibility to exogenous amenities. The residential equilibrium is driven by the properties of an amenity-commuting aggregator obtained from the primitives of the model. Using micro-data on the Randstad (the Netherlands), we find that doubling the amenity level, resp. commuting time, attracts households whose incomes are 1 -2:5% higher, resp. 6 - 17:5% lower. Using the model's estimated parameters, we predict the impact of changes in accessibility to jobs and amenities on the social structure of the Randstad.

Keywords: amenities, cities, commuting, Income, social stratification

JEL Classification: R14, R23, R53, Z13

Suggested Citation

Gaigne, Carl and Koster, Hans and Moizeau, Fabien and Thisse, Jacques-François, Who Lives Where in the City? Amenities, Commuting and Income Sorting (April 2017). CEPR Discussion Paper No. DP11958. Available at SSRN: https://ssrn.com/abstract=2954479

Carl Gaigne (Contact Author)

French National Institute for Agricultural Research (INRA) - UMR 1302 SMART ( email )

4 allée Adolphe Bobierre
CS 61103
Rennes Cedex, 35011
France

Hans Koster

Vrije Universiteit Amsterdam, School of Business and Economics ( email )

De Boelelaan 1105
Amsterdam, 1081HV
Netherlands

Fabien Moizeau

Université Paris I Panthéon-Sorbonne - Equipe Universitaire de Recherche en Economie Quantitative (EUREQUA) ( email )

106-112 Boulevard de l'Hopital
Paris Cedex 13, 75647
France

Jacques-François Thisse

Catholic University of Louvain (UCL) ( email )

Place des Doyens 1
Louvain-la-Neuve, 1348
Belgium

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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