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URBAN POPULATION AND AMENITIES: THE NEOCLASSICAL MODEL OF LOCATION
Author(s) -
Albouy David,
Stuart Bryan A.
Publication year - 2020
Publication title -
international economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.658
H-Index - 86
eISSN - 1468-2354
pISSN - 0020-6598
DOI - 10.1111/iere.12419
Subject(s) - economics , productivity , population density , population , wage , general equilibrium theory , land use , labour economics , econometrics , demographic economics , agricultural economics , natural resource economics , microeconomics , macroeconomics , ecology , demography , sociology , biology
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.