Working Paper: NBER ID: w19919
Authors: David Albouy; Bryan Stuart
Abstract: We analyze a neoclassical general-equilibrium model to explain cross-metro variation in population, density, and land supply based on three amenity types: quality-of-life, productivity in tradables, and productivity in non-tradables. We develop a new method to estimate elasticities of housing and land supply, and local-productivity estimates, from cross-sectional density and land-area data. From wage and housing-cost indices, the model explains half of U.S. density and total population variation, and finds that quality of life determines locations more than employment opportunities. We show how changing quality of life, relaxing land-use regulations, or neutralizing federal taxes can redistribute populations massively.
Keywords: urban economics; population density; amenities; neoclassical model; land supply
JEL Codes: H20; R12; R23; R31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| quality of life amenities (I31) | population density (J11) |
| amenities (Z31) | population density (J11) |
| relaxing land-use regulations (R38) | population redistributions (R23) |
| neutralizing federal taxes (H29) | population redistributions (R23) |
| quality of life amenities (I31) | location choices (R32) |
| model explains variation in population density (J11) | population density (J11) |