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Driving to Opportunity: Local Rents, Wages, Commuting Costs and Sub-Metropolitan Quality of Life

David Albouy () and Bert Lue

No 19922, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We examine variation in local wage levels, housing costs, and commuting costs for 2071 areas covering the United States within and across metropolitan areas. In an equilibrium model of residential and workplace choice, we use these measures to construct a willingness-to-pay index for a typical household. When households are sufficiently homogeneous and mobile, this index indicates the perceived value of local household amenities, or “quality of life.” Wage levels vary little within metropolitan areas relative to across them, while individual characteristics that predict wages vary more within, suggesting patterns about sorting. Quality of life varies as much within metros as across them, and is typically high in areas that are dense, suburban, mild, safe, entertaining, and have higher school-funding.

JEL-codes: H73 Q51 R21 R23 R41 (search for similar items in EconPapers)
Date: 2014-02
New Economics Papers: this item is included in nep-geo, nep-lab, nep-lma and nep-ure
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Published as David Albouy with Bert Lue, 2015 “Driving to Opportunity: Local Rents, Wages, Commuting, and Sub-Metropolitan Quality-of-Life Measures.” Published: Journal of Urban Economics, Elsevier, 89, 74–92, September

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