Working Paper: NBER ID: w13071
Authors: Edward L. Glaeser; Kristina Tobio
Abstract: In the last 50 years, population and incomes have increased steadily throughout much of the Sunbelt. This paper assesses the relative contributions of rising productivity, rising demand for Southern amenities and increases in housing supply to the growth of warm areas, using data on income, housing price and population growth. Before 1980, economic productivity increased significantly in warmer areas and drove the population growth in those places. Since 1980, productivity growth has been more modest, but housing supply growth has been enormous. We infer that new construction in warm regions represents a growth in supply, rather than demand, from the fact that prices are generally falling relative to the rest of the country. The relatively slow pace of housing price growth in the Sunbelt, relative to the rest of the country and relative to income growth, also implies that there has been no increase in the willingness to pay for sun-related amenities. As such, it seems that the growth of the Sunbelt has little to do with the sun.
Keywords: Sunbelt; Population Growth; Housing Supply; Productivity; Amenities
JEL Codes: A1
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Rising productivity (O49) | Population growth (J11) |
| Rising productivity (O49) | Nominal income growth (O49) |
| Rising productivity (O49) | Housing price growth (R31) |
| Increases in housing supply (R31) | Population growth (J11) |
| Increases in housing supply (R31) | Income growth (O49) |
| Increases in housing supply (R31) | Housing price growth (R31) |
| Amenity flows decline (R11) | Population growth (J11) |