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Do Urban Amenities Drive Housing Rent?

Chihiro Shimizu, Shinya Yasumoto, Yasushi Asami and Terry Nichols Clark

No 9, HIT-REFINED Working Paper Series from Institute of Economic Research, Hitotsubashi University

Abstract: What brought the concentration of people to certain areas? And how much are households prepared to pay in exchange for being part of such concentrations? Focusing on the Tokyo metropolitan area, which is one of the world’s largest urban areas, this paper aggregates individual data relating to urban amenities in small areas and explores its relationship to population concentration, as well as clarifying its relationship to rent (housing service prices). It is understood from the obtained results that a concentration f urban amenities produces population concentration and also raises housing rent. In addition, it is shown that when measuring the degree of amenity concentration, it is the diversity of amenities, not simply the total number of amenities that is important. Concentration of diverse amenities enhances an area’s appeal, and as a result, households will seek to reside there even if rents are high. Among the various types of amenities, it was observed that amenities such as recreational classes, educational facilities and convenience facilities such as restaurants have positive externality. On the other hand, a clear negative relationship was found between housing rent and amenities with negative externality, such as cemeteries and video arcades.

Keywords: amenity concentration; population concentration; housing service prices; hedonic approach; Geographic Information System (GIS) (search for similar items in EconPapers)
JEL-codes: C31 R31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ure
Date: 2014-09
Note: First version: July 26, 2014, This version: Aug 16, 2014
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