Why does skill intensity vary across cities? The role of housing cost

Broxterman, Daniel; Yezer, Anthony M.

doi:10.1016/j.regsciurbeco.2015.08.003

Cited by 13 publications

(6 citation statements)

References 25 publications

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“…But all these results rely on the assumption of homogeneous agents. Broxterman and Yezer () have demonstrated that skill intensity of the workforce is an increasing function of housing price. That is, as housing prices rise with city size, the average educational level of households rises also.…”

Section: Empirical Test Of the Propositionsmentioning

confidence: 99%

Housing Consumption Declines With Income in the Open‐city Model: Theory and Empirical Evidence

Liu

2016

Journal of Regional Science

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This paper demonstrates that the standard urban model (SUM) has important, previously unknown, and rather counterintuitive predictions about the determinants of housing consumption in cities. For example, the SUM predicts that, as higher wages in the central business district prompt city growth, the housing space per household falls, that is, rising income is associated with falling housing consumption. Empirical testing using a specially constructed panel data set of U.S. cities, confirms this prediction. When city size, income, and housing price rise, housing space per household falls.

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Section: Empirical Test Of the Propositionsmentioning

confidence: 99%

Housing Consumption Declines With Income in the Open‐city Model: Theory and Empirical Evidence

Liu

2016

Journal of Regional Science

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“…Davis and Ortalo-Magne (2011) have shown using microdata on incomes and rents that average housing expenditures are remarkably consistent across metro areas, lending direct support for this type of utility function. However, the utility function has been challenged for its failure to hold across the income distribution (Black et al (2014), Broxterman and Yezer (2015)). Considering the current model focuses on across city differences and uses homogenous agents, the functional specification seems appropriate for the context.…”

Section: A2 Calibrationsmentioning

confidence: 99%

An Approach for Empirical Work in Spatial Dynamics

Mangum

2017

SSRN Journal

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This paper illustrates how to incorporate forward-looking behavior into empirical spatial equilibrium models with locational heterogeneity. The main insight is that the standard spatial equilibrium already embeds a natural starting point for dynamics: the presence of spatial indifference conditions can dramatically simplify the state space of forward-looking agents. One needs to know how utility evolves with the variables in the system, but not every individual state, effectively side-stepping the curse of dimensionality. Standard numerical rational expectations methods can be applied to derive approximate solutions to the full dynamic specification. The paper uses an example model of landowners exercising real options in construction of housing to show how the approximation's errors are negligibly small, and importantly, much smaller than the differences between dynamic and myopic specifications of the same model.

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“…Davis and Ortalo-Magne (2011) have shown using microdata on incomes and rents that average housing expenditure shares are remarkably consistent across metro areas, lending direct support for this type of utility function. However, the utility function has been challenged for its failure to hold across the income distribution of households (Black et al (2014), Broxterman and Yezer (2015)). Considering the current model focuses on across city differences and uses homogenous agents, the functional specification seems appropriate for the context.…”

Section: Using Model Conditionsmentioning

confidence: 99%

The Role of Housing in Carbon Emissions

Mangum

2017

SSRN Journal

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This paper studies the impact of regional housing and land stock allocations on carbon emissions and the role for policy therein. It first measures the role of home sizes and population densities in determining differences between U.S. urban areas in carbon footprint of their residents, which the literature has shown to be large. Then it develops a dynamic spatial equilibrium model of housing stock evolution between connected, heterogenous markets to measure the impact of housing policies on aggregate emissions. The main finding is that policies incentivizing an intensive use of housing have direct effects on carbon emission by increasing energy usage and creating lower density cities, and indirectly, these tilt population allocation towards higher emissions cities, which offer more housing consumption on average. The paper derives emission-equivalent values for the user cost of housing, land use regulations, and carbon taxes.

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Why does skill intensity vary across cities? The role of housing cost

Cited by 13 publications

References 25 publications

Housing Consumption Declines With Income in the Open‐city Model: Theory and Empirical Evidence

Housing Consumption Declines With Income in the Open‐city Model: Theory and Empirical Evidence

An Approach for Empirical Work in Spatial Dynamics

The Role of Housing in Carbon Emissions

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