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Amenities and the Social Structure of Cities

Carl Gaigne, Hans Koster (), Fabien Moizeau () and Jacques Thisse ()
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Hans Koster: VU University Amsterdam - Faculty of Economics and Business Administration

No WP BRP 162/EC/2017, HSE Working papers from National Research University Higher School of Economics

Abstract: We develop a new model of a "featureful" city in which locations are differentiated by two attributes, that is, the distance to employment centers and the accessibility to given amenities, and we show how heterogeneous households in income are sorted out across the urban space. Under Stone-Geary preferences, the spatial income distribution is governed by a location-quality index which reffects the interaction between the amenity and commuting cost functions. The residential equilibrium typically involves the spatial separation of households sharing similar incomes. Using data on Dutch cities, we show that there is a causal relationship between the amenity level and consumer income, suggesting that richer households sort themselves into high amenity locations. We do not find strong evidence that employment accessibility leads to income segregation, suggesting that the standard monocentric city model without amenities is a poor predictor of the social structure of cities.

Keywords: cities; social stratication; income; amenities; commuting (search for similar items in EconPapers)
JEL-codes: R14 R23 R53 Z13 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-geo and nep-ure
Date: 2017
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Published in WP BRP Series: Economics / EC, April 2017, pages 1-76

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https://wp.hse.ru/data/2017/04/27/1171736898/162EC2017.pdf (application/pdf)

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Working Paper: Amenities and the Social Structure of Cities (2017) Downloads
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