The Rising Value of Time and the Origin of Urban Gentrification

Yichen Su

American Economic Journal: Economic Policy, 2022, vol. 14, issue 1, 402-39

Abstract: In recent decades, gentrification has transformed American central city neighborhoods. I estimate a spatial equilibrium model to show that the rising value of high-skilled workers' time contributes to the gentrification of American central cities. I show that the increasing value of time raises the cost of commuting and exogenously increases the demand for central locations by high-skilled workers. While change in the value of time has a modest direct effect on gentrification of central cities, the effect is substantially magnified by endogenous amenity change driven by the changes in local skill mix.

JEL-codes: J22 J24 R21 R23 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1257/pol.20190550

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