A Revealed Preference Index of Urban Amenities: Using Travel Demand as a Proxy

48 Pages Posted: 2 Jul 2018 Last revised: 22 Mar 2019

See all articles by Daniel Broxterman

Daniel Broxterman

Florida State University, College of Business

Chun Kuang

University of International Business and Economics (UIBE) - School of Banking and Finance

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Date Written: March 5, 2019

Abstract

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

Broxterman, Daniel and Kuang, Chun, A Revealed Preference Index of Urban Amenities: Using Travel Demand as a Proxy (March 5, 2019). Available at SSRN: https://ssrn.com/abstract=3196804 or http://dx.doi.org/10.2139/ssrn.3196804

Daniel Broxterman (Contact Author)

Florida State University, College of Business ( email )

821 Academic Way
RBA 417
Tallahassee, FL 32306-1110
United States
8506448221 (Phone)

Chun Kuang

University of International Business and Economics (UIBE) - School of Banking and Finance ( email )

No.10, Huixindong Street
Chaoyang District
Beijing, 100029
China

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