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The Economic Value of Cultural Diversity: Evidence from US Cities

Gianmarco Ottaviano () and Giovanni Peri ()

No 4233, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We use data on wages and rents in different US cities to assess the amenity effects on production and consumption of cultural diversity as measured by diversity of countries of birth of city residents. We show that US-born citizens living in metropolitan areas where the share of foreign-born increased between 1970 and 1990 have experienced a significant average increase in their wage and in the rental price of their housing. Such finding is economically significant and robust to omitted variable bias and endogeneity bias. We then present a model in which cultural diversity may have both production and consumption amenity or disamenity effects. As people and firms are mobile across cities in the long run, the model implies that the joint results from the wage and rent regressions are consistent with a dominant production amenity effect of cultural diversity.

Keywords: cultural diversity; local amenities; productivity; R00; urban economics (search for similar items in EconPapers)
JEL-codes: F10 O40 (search for similar items in EconPapers)
Date: 2004-02
New Economics Papers: this item is included in nep-ure
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Related works:
Chapter: The economic value of cultural diversity: evidence from US cities (2016) Downloads
Journal Article: The economic value of cultural diversity: evidence from US cities (2006) Downloads
Working Paper: The Economic Value of Cultural Diversity: Evidence from US Cities (2004) Downloads
Working Paper: The Economic Value of Cultural Diversity: Evidence from US cities (2004) Downloads
Working Paper: The Economic Value of Cultural Diversity: Evidence from US Cities (2004) Downloads
Working Paper: The Economic Value of Cultural Diversity: Evidence from US Cities (2004) Downloads
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