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Hilton Atlanta, 215
American Real Estate and Urban Economics Association
Density, Spillovers and Amenities
Sunday, Jan. 6, 2019 8:00 AM - 10:00 AM
- Chair: Jan Brueckner, University of California-Irvine
Separating Selection From Spillover Effects: Using the Mode to Estimate the Return to City Size
AbstractWe develop a new method to identify and control for selection when estimating the productivity effects of city size. For single peaked factor return distributions, selecting out low-performing agents has no effect on modal productivity but reduces the CDF evaluated at the mode. Spillovers from agglomeration have the reverse effect. This holds regardless of whether selection arises from the decision to participate or location choice. Estimates based on law firm productivity, wages for married women and wages for full-time men all confirm that selection contributes to urban productivity and that doubling city size causes productivity to increase by 1-2 percent.
Unlocking Amenities: Estimating Public Good Complementarity
AbstractResearch on public goods generally considers the value of individual public goods in isolation, when in fact there may be strong complementarities between them. This study examines the implications of public goods complementarities for economic valuation and efficient public investment, using the setting of public safety and open space in inner cities. Cross-sectional, difference-in-difference, and instrumental-variable estimates from Chicago, New York, and Philadelphia all indicate that local crime lowers the amenity value of public parks to nearby residents. Public safety improvements ``unlock'' the value of open-space amenities, and could raise the value that properties receive from adjacent parks from $22 billion to $31 billion in those three cities. Ignoring these complementarities risks over-estimating benefits in dangerous areas, under-estimating benefits in poor areas or conflating reduced amenity value with the preferences of local populations, and under-estimating benefits overall. While safety is more fundamental in a hierarchy of amenities, open spaces are not a luxury.
The Internal Geography of Firms
AbstractWe document four facts regarding the geographic location patterns of firms: firms' establishments are clustered together; as they expand, firms place new establishments further away from their center and become more dispersed; larger, more productive firms are more dispersed, even accounting for the number of establishments in the firm; and establishments that are further away from their firm center are smaller and less productive. These findings are consistent with the hypothesis that firms face internal distance costs and that these costs may significantly affect the geographic distribution of economic activity. We find substantial heterogeneity in our results. Larger firms are less clustered, and firm size appears to attenuate the relationship between dispersion and productivity: establishments of larger firms do not decline in size with distance, and larger firms that are more dispersed are not more productive.
Federal Reserve Bank of Philadelphia
University of Rochester
University of British Columbia
- G1 - General Financial Markets
- R1 - General Regional Economics