The Rising Value of Time and the Origin of Urban Gentrification

Abstract

In recent decades, gentrification has transformed American central city neighborhoods. I estimate a spatial equilibrium model to show that the rising value of high-skilled workers' time contributes to the gentrification of American central cities. I show that the increasing value of time raises the cost of commuting and exogenously increases the demand for central locations by high-skilled workers. While change in the value of time has a modest direct effect on gentrification of central cities, the effect is substantially magnified by endogenous amenity improvement driven by the changes in local skill mix.

Closing Time: The Local Equilibrium Effects of Prohibition

“…We then find evidence of agglomeration that results from these higher land values, which we believe is a novel result. Lastly, we show sorting patterns from higher land prices that are quite different than other studies because they have focused on amenity’s effects on rents rather than productivity (Guerrieri, Hartley, and Hurst 2013; Diamond 2016; Autor, Palmer, and Pathak 2017; Su 2020). 11…”

The Value of Time in the United States: Estimates from Nationwide Natural Field Experiments

“…For the economy as a whole, the VOT depends on how different people respond to the market and non-market signals in allocating their monetary resources and time (Juster and Stafford, 1991). These allocation decisions of time impact where people live (Wheaton, 1977;Van Ommeren and Fosgerau, 2009;Su, 2018;Kreindler and Miyauchi, 2019), how they supply their labor (Aguiar and Hurst, 2007b;Aguiar et al, 2013Aguiar et al, , 2017Benhabib et al, 1991;Gelber and Mitchell, 2012;Goldin, 2014;Gronau, 1973;Pallais, 2017, 2019), how they commute (Small et al, 2005;Bento et al, 2017;Hall, 2020), how they invest in their health (Besley et al, 1999;Miller and Urdinola, 2010;Philipson et al, 2010), and what goods they buy (Nevo and Wong, 2015). VOT estimates have also become increasingly important in international debates about productivity and national accounting (Krueger et al, 2009;Nordhaus, 2009;Aguiar and Hurst, 2016), for the welfare estimation of business cycles (Aguiar et al, 2013), and the VOT is a central feature in governments and companies as a basis for investment decisions for the supply of intangible and service goods within economies.…”

The Value of Time: Evidence from Auctioned Cab Rides

“…Although it does not use high resolution spatial data,Su (2018) is also related to this strand. The author studies the causal link between the value of time and gentrification.…”