Housing Constraints and Spatial Misallocation

Hsieh, Chang-Tai; Moretti, Enrico

doi:10.1257/mac.20170388

Cited by 243 publications

(171 citation statements)

References 88 publications

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“…() consider trade costs and monopolistic competition in models that start from, yet restrict, the benchmark neoclassical model. Our results on the role of land use regulations complement recent work by Hsieh and Moretti (), who focus on how these regulations affected economic growth between 1964 and 2009.…”

supporting

confidence: 80%

“…Given the importance of the home good sector, we focus on the effects of lowering land use regulations in cities for inhabitants with above‐average regulation. This exercise is similar to Hsieh and Moretti ()—who lower regulations more dramatically—although we examine levels instead of growth . We hold amenities fixed in these counterfactuals.…”

Section: Population Determinants and Counterfactual Exercisesmentioning

confidence: 93%

“…Suppose that the indirect utility of worker i in city j is money metric, with

V_{i}^{j} = v false(p^{j}, w^{j}; Q^{j} false) + ε_{i}^{j}

, where

v (p^{j}, w^{j}; Q^{j})

is a function common to households and

ε_{i}^{j}

is an idiosyncratic preference shock. Following the literature—for example, Kline and Moretti (), Suárez Serrato and Zidar (), and Hsieh and Moretti ()—we make the convenient assumption that

ε_{i}^{j}

is distributed i.i.d. Type 1 Extreme Value with scale parameter

ψ \geq 0

.…”

Section: The Neoclassical Model Of Locationmentioning

confidence: 99%

“…This is consistent with households having higher housing expenditures in high‐rent areas and housing having a higher cost‐share of land in high‐value areas (Albouy et al., ; Albouy and Ehrlich, ). When we incorporate preference heterogeneity, we use a value of

ψ = 0.07

from Notowidigdo (Forthcoming) or

ψ = 0.30

from Hsieh and Moretti () . Online Appendix contains additional details on the parametrization.…”

Section: Parameter Choices and Reduced‐form Elasticitiesmentioning

confidence: 99%

“…This article contributes to a broad literature on spatial equilibrium models that study the distribution of economic activity across space (e.g., Rappaport, , ; Glaeser and Gottlieb, ; Saiz, ; Desmet and Rossi‐Hansberg, ; Lee and Li, ; Suárez Serrato and Zidar, ; Diamond, ; Hsieh and Moretti, ) . Our technique of using a cross section of easily observed data—wages, rents, population, and land area—is particularly novel and easy to apply.…”

Section: Introductionmentioning

confidence: 99%

See 4 more Smart Citations

Urban Population and Amenities: The Neoclassical Model of Location

Albouy

Stuart

2020

Int Economic Review

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We develop a neoclassical general equilibrium model to explain cross‐metro variation in population and density. We provide new methods to estimate traded and nontraded productivities, and elasticities of housing and land supply, using density and land area data. From wage and housing cost indices, the model explains half of U.S. density and population variation and finds that quality of life determines location choices more than trade productivity; productivity and factor substitution in housing matter most, but are weak in nicer areas. Relaxing land use regulations would increase population in the West, raising both quality of life and productivity experienced by residents.

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supporting

confidence: 80%

Section: Population Determinants and Counterfactual Exercisesmentioning

confidence: 93%

“…Suppose that the indirect utility of worker i in city j is money metric, with

V_{i}^{j} = v false(p^{j}, w^{j}; Q^{j} false) + ε_{i}^{j}

, where

v (p^{j}, w^{j}; Q^{j})

is a function common to households and

ε_{i}^{j}

is an idiosyncratic preference shock. Following the literature—for example, Kline and Moretti (), Suárez Serrato and Zidar (), and Hsieh and Moretti ()—we make the convenient assumption that