The Push of Big City Prices and the Pull of Small Town Amenities

39 Pages Posted: 22 Dec 2022

See all articles by Heidi Artigue

Heidi Artigue

University of Pennsylvania - Business & Public Policy Department

Jeffrey Brinkman

Federal Reserve Banks - Federal Reserve Bank of Philadelphia

Svyatoslav Karnasevych

Federal Reserve Banks - Federal Reserve Bank of Philadelphia

Multiple version iconThere are 2 versions of this paper

Date Written: December 1, 2022

Abstract

As house prices continue to rise in large, supply-constrained cities, what are the implications for other places that have room to grow? Recent literature suggests that amenities that improve quality of life are becoming increasingly important in location decisions. In this paper, we explore how location amenities have differentially driven population and price dynamics in small towns versus big cities, with a focus on the role of housing supply. We provide theory and evidence that demand for high-amenity locations has increased in recent decades. High-amenity counties in large metropolitan areas have experienced relatively higher price increases, while high-amenity counties in small metros and rural areas have absorbed increased demand through population growth. This divergence in population dynamics between big cities and small towns was driven by domestic migration, with high-amenity small towns and rural areas experiencing significant domestic in-migration.

Keywords: housing supply, amenities, population dynamics, domestic migration

JEL Classification: R11, R31, R23

Suggested Citation

Artigue, Heidi and Brinkman, Jeffrey and Karnasevych, Svyatoslav, The Push of Big City Prices and the Pull of Small Town Amenities (December 1, 2022). FRB of Philadelphia Working Paper No. 22-41, Available at SSRN: https://ssrn.com/abstract=4309182 or http://dx.doi.org/10.21799/frbp.wp.2022.41

Heidi Artigue (Contact Author)

University of Pennsylvania - Business & Public Policy Department ( email )

3641 Locust Walk
Philadelphia, PA 19104-6372
United States

Jeffrey Brinkman

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

Ten Independence Mall
Philadelphia, PA 19106-1574
United States

Svyatoslav Karnasevych

Federal Reserve Banks - Federal Reserve Bank of Philadelphia

Ten Independence Mall
Philadelphia, PA 19106-1574
United States

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