Urban Decline and Durable Housing

Edward Glaeser and Joseph Gyourko

No 8598, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: People continue to live in many big American cities, because in those cities housing costs less than new construction. While cities may lose their productive edge, their houses remain and population falls only when housing depreciates. This paper presents a simple durable housing model of urban decline with several implications which document: (1) urban growth rates are leptokurtotic -- cities grow more quickly than they decline, (2) city growth rates are highly persistent, especially amount declining cities, (3) positive shocks increase population more than they increase housing prices, (4) negative shocks decrease housing prices more than they decrease population, (5) the relationship between changes in housing prices and changes in population is strongly concave, and (7) declining cities attract individuals with low levels of human capital.

JEL-codes: R (search for similar items in EconPapers)
Date: 2001-11
New Economics Papers: this item is included in nep-mic
Note: EFG PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (52)

Published as Edward L. Glaeser & Joseph Gyourko, 2005. "Urban Decline and Durable Housing," Journal of Political Economy, University of Chicago Press, vol. 113(2), pages 345-375, April.

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Working Paper: Urban Decline and Durable Housing (2001)
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