The Rise of the Sunbelt

56 Pages Posted: 27 Jun 2007 Last revised: 20 Sep 2010

See all articles by Edward L. Glaeser

Edward L. Glaeser

Harvard University - Department of Economics; Brookings Institution; National Bureau of Economic Research (NBER)

Kristina Tobio

Harvard Business School

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Date Written: April 2007

Abstract

In the last 50 years, population and incomes have increased steadily throughout much of the Sunbelt. This paper assesses the relative contributions of rising productivity, rising demand for Southern amenities and increases in housing supply to the growth of warm areas, using data on income, housing price and population growth. Before 1980, economic productivity increased significantly in warmer areas and drove the population growth in those places. Since 1980, productivity growth has been more modest, but housing supply growth has been enormous. We infer that new construction in warm regions represents a growth in supply, rather than demand, from the fact that prices are generally falling relative to the rest of the country. The relatively slow pace of housing price growth in the Sunbelt, relative to the rest of the country and relative to income growth, also implies that there has been no increase in the willingness to pay for sun-related amenities. As such, it seems that the growth of the Sunbelt has little to do with the sun.

Suggested Citation

Glaeser, Edward L. and Tobio, Kristina, The Rise of the Sunbelt (April 2007). NBER Working Paper No. w13071. Available at SSRN: https://ssrn.com/abstract=986921

Edward L. Glaeser (Contact Author)

Harvard University - Department of Economics ( email )

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Kristina Tobio

Harvard Business School ( email )

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