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A New Spatial Hedonic Equilibrium in the Emerging Work-from-Home Economy?

  • Jan K. Brueckner
  • Matthew E. Kahn
  • Gary C. Lin
American Economic Journal: Applied Economics
vol. 15, no. 2, April 2023
(pp. 285-319)
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Abstract

This paper studies the impacts of work from home (WFH) in the housing market from both intercity and intracity perspectives. Our results confirm the theoretical prediction that WFH puts downward pressure on housing prices and rents in high-productivity counties, a result of workers starting to relocate to cheaper metro areas during the pandemic without forsaking their desirable jobs. We also show that WFH tends to flatten intracity house-price gradients, weakening the price premium associated with good job access.

Citation

Brueckner, Jan K., Matthew E. Kahn, and Gary C. Lin. 2023. "A New Spatial Hedonic Equilibrium in the Emerging Work-from-Home Economy?" American Economic Journal: Applied Economics, 15 (2): 285-319. DOI: 10.1257/app.20210190

Additional Materials

JEL Classification

  • J24 Human Capital; Skills; Occupational Choice; Labor Productivity
  • J31 Wage Level and Structure; Wage Differentials
  • J61 Geographic Labor Mobility; Immigrant Workers
  • R21 Urban, Rural, Regional, Real Estate, and Transportation Economics: Housing Demand
  • R23 Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics
  • R31 Housing Supply and Markets
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