A Revealed Preference Index of Urban Amenities: Using Travel Demand as a Proxy
48 Pages Posted: 2 Jul 2018 Last revised: 22 Mar 2019
Date Written: March 5, 2019
We introduce an index of urban amenities based on hotel night stays that can rank most U.S. metros in levels and changes for the years 1990 through 2015. This naive index can be used on its own to study changes in total amenity level or with other measures to reduce omitted variable bias. Researchers can also use the index to create panel datasets from more sophisticated cross-sectional indexes. Empirical testing shows the bundle of amenities associated with hotel stays has substantial effects on variation in housing prices across cities and time, validating our proxy variable approach to measuring urban amenity levels. Testing for an association with wages is inconclusive.
Keywords: consumption amenities, compensating differentials
JEL Classification: J31, R23
Suggested Citation: Suggested Citation