Diamond 20 takes this a step further, allowing for heterogeneity across workers in both preferences and productivity across locations. Quality of life, city size, real wages, costofliving, federal taxation, compensating. Albouy, david 2009a, the unequal geographic burden of federal taxation. May 26, 2009 this article examines and quantifies the relationship between local amenities and prices in an equilibrium model, demonstrating the role of nontraded goods and federal taxes. Land rents, local productivity, and the capitalization of amenity.
Improving qualityoflife estimates across cities david albouy nber working paper no. Quality of life, firm productivity, and the value of amenities across canadian cities d albouy, f. Quality of life, firm productivity, and the value of amenities across canadian cities david albouy, fernando leibovici, and casey warman nber working paper no. National income taxation and the geographic distribution of. May 17, 20 albouy is also affiliated with the nber. Albouy 2009 derives most of the theoretical results. Why do discrete choice approaches to valuing climate. These e ects are modeled by albouy 2009 with exogenous amenities, but are modeled here with amenities that are endogenous to city population. Second, we use hedonic regressions to extract the spatial variation in real wages and rents that is explained by spatial variation in amenities. Correspondence david albouy, university of illinois, department of economics, 1407 w. Quality of life and valuing amenities p s vs vw lc dr ds dw ds 5 albouy 2012 takes the total differential of the spatial equilibrium equation and loglinearizes around national averages of wages and prices. Quality of life, firm productivity, and the value of amenities across canadian cities david albouy university of michigan and nber fernando leibovici new york university casey warman queens university february 27, 2012 please contact at the department of economics, 611 tappan st.
I derive formulae using factor shares to infer local land rents, productivity, and the total value of amenities from wage and housingcost data, applying them to u. David albouy university of illinois and nber april 21, 2015. Differences in amenity values are capitalized into the sum of local land values and. Land rents, local productivity, and the capitalization of amenity values david albouy nber working paper no. H2,h4,j30,q5,r1 abstract across cities, estimates of local land rents and firm productivity are inferable from wage and housingcost data using knowledge of the housing cost function. Victoria yields the highest quality of life, followed by other cmas in british. A neoclassical migration equilibrium model is used to analyze the current nominal income tax system in norway. We would like to thank kevin milligan, james milway, daniel parent, and participants of seminars at mcgill university, queens university, simon fraser university, the university of british columbia, and the university of victoria, and attendees at the 2009 canadian economics association and western economics association annual meetings for their help. The national economy contains many cities, indexed by j, which. Let x be a good that is traded across locations and has a price of 1. The optimal population distribution across cities and the private. Amenities across canadian cities david albouy university of michigan fernando leibovici new york university casey warman queens university department of economics queens university 94 university avenue kingston, ontario, canada k7l 3n6 12012. Partisan representation in congress and the geographic distribution of federal funds w15224.
I derive formulae using factor shares to infer local land rents, productivity, and the total value of amenities from wage and housingcost data, applying them to. The unequal geographic burden of federal taxation authors. The optimal population distribution across cities and the. H4,j3,q51,q54,r1 abstract the standard revealedpreference hedonic estimate of a citys quality of life is proportional to that citys costofliving relative to its wagelevel. Similarly, in the benchmark exercise, the range of amenities across cities amounts to 12 percent of utility. National bureau of economic research working paper no. Highly valuable cities are typically coastal, temperate, sunny, and have large or welleducated populations. Immigration and the pursuit of amenities albouy journal. To value amenities that vary across cities, researchers have typically followed one of two approaches. Finally, albouy 2009 estimates the separate e ects of production and consumption amenities in wage and price di erences across cities, nding a larger role for production. Albouy says that city folk shouldnt expect relief from this system anytime soon. Cities differ in their productivity in the housing sector, aj y. Observe that the elasticity of city size to amenities a falls. Second, we use hedonic regressions to extract the spatial variation in real wages and rents that is.
In general, our estimates suggest denser cities have greater amenity levels. Mild seasons, sunshine, and coastal location account for most qualityoflife differences. Quality of life, firm productivity, and the value of. I model housing here in a static setting, as in albouy 2009, over numerous locations. The unequal geographic burden of federal taxation david albouy university of michigan and national bureau of economic research. H2,h4,j30,q5,r1 abstract estimates of local land rents and firm productivity from wage and housingcost data should incorporate parameters from the housing production function. We study how different national taxation schemes interact with geographic variation in productivity and consumption amenities in determining regional populations. If urban size bene ts rms but harms households, then federal taxes impose tolls that are highest in the largest cities, strongly discouraging migration. Let y be housing, which cannot be traded across cities. Land rents, local productivity, and the capitalization of amenity values, nber working papers 14981, national bureau of economic research, inc.
These effects are modeled by albouy 2009b with exogenous amenities, but are modeled here with amenities that are endogenous to city population. Quality of life, firm productivity, and the value of amenities across. Quality of life, productivity, and the value of amenities across cities. J31,j61,q51,r1 abstract we present hedonic generalequilibrium estimates of qualityoflife and productivity differences across canadas metropolitan areas. Comparable workers earn higher real wages in large cities, where amenities are also concentrated.
The optimal distribution of population across cities. Lee 2006 provides evidence that similar workers in the medical professions do indeed earn lower wages in larger cities while albouy 2009 provides evidence of no strong relationship between city size and quality of. These analyses make seek to control for spatial variation in land variation to focus on variation over time. The analysis is based on estimated regional income differences accounting for both observable and unobservable individual. David albouy, 20 partisan representation in congress and the distribution of federal funds.
Land rents, local productivity, and the value of amenities. Cities that offer superior natural amenities like a mild climate or a benign physical environment andor highquality constructed or manmade amenities a wide range of consumer goods and local public services are seen as attractive, that is, as amenityrich cities partridge, 2010 partridge, m. Understanding the city size wage gap duke university. The second, by nichols, oliner and mulhall 2103, pools uses and develops semiannual indices from the mid1990s to mid2011 for 23 metro areas. Nov 23, 2019 immigration and the pursuit of amenities. Highly taxed areas tend to be in large cities inside of populous states, which have low congressional representation per capita, making the prospect of reform daunting, he writes. Quality of life, firm productivity, and the value of amenities across canadian cities d albouy, f leibovici, c warman canadian journal of economicsrevue canadienne deconomique 46 2, 379411, 20. Albouy and stuart, w19919 urban population and amenities. They have used either hedonic models of wages and housing prices roback 1982. The national economy contains many cities indexed by j, which produce a numeraire good, x, traded across cities, and housing, y, which is not traded across cities, and has a local price, p j.842 1149 1186 234 502 823 1232 1400 474 480 306 555 400 1285 297 791 887 1268 133 872 1109 847 476 523 20 784 500 610 1500 1371 763 1491 696 719 1441 953 1062 549 619 122