Amenities and the Social Structure of Cities

76 Pages Posted: 28 Apr 2017

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 27, 2017

Abstract

We develop a new model of a "featureful" city in which locations are differentiated by two attributes, that is, the distance to employment centers and the accessibility to given amenities, and we show how heterogeneous households in income are sorted out across the urban space. Under Stone-Geary preferences, the spatial income distribution is governed by a location-quality index which reflects the interaction between the amenity and commuting cost functions. The residential equilibrium typically involves the spatial separation of households sharing similar incomes. Using data on Dutch cities, we show that there is a causal relationship between the amenity level and consumer income, suggesting that richer households sort themselves into high amenity locations. We do not find strong evidence that employment accessibility leads to income segregation, suggesting that the standard monocentric city model without amenities is a poor predictor of the social structure of cities.

Keywords: cities, social stratication, income, amenities, commuting

JEL Classification: R14, R23, R53, Z13

Suggested Citation

Gaigne, Carl and Koster, Hans and Moizeau, Fabien and Thisse, Jacques-François, Amenities and the Social Structure of Cities (April 27, 2017). Higher School of Economics Research Paper No. WP BRP 162/EC/2017. Available at SSRN: https://ssrn.com/abstract=2959386 or http://dx.doi.org/10.2139/ssrn.2959386

Carl Gaigne

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 (Contact Author)

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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