What Are Cities Worth? Land Rents, Local Productivity, and the Capitalization of Amenity Values

David Yves Albouy ()

No 14981, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Estimates of local land rents and firm productivity from wage and housing-cost data should incorporate parameters from the housing production function. Across cities, differences in amenity values are capitalized into the sum of local land values and federal-tax payments. Improved modeling is used to predict how amenities affect wages and housing costs, estimate quality-of-life and firm-productivity differences across U.S. cities, and revise estimates of the value of public infrastructure investments. Land values vary mainly from quality-of-life differences, while total city values vary mainly from firm-productivity differences. The most valuable cities are generally coastal, sunny, and have large or well-educated populations.

JEL-codes: H2 H4 J30 Q5 R1 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eff, nep-geo and nep-ure
Date: 2009-05
Note: EEE PE
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