Natural Amenities, Neighborhood Dynamics, and Persistence in the Spatial Distribution of Income

54 Pages Posted: 11 Dec 2013

See all articles by Sanghoon Lee

Sanghoon Lee

University of British Columbia (UBC) - Sauder School of Business

Jeffrey Lin

Federal Reserve Banks - Federal Reserve Bank of Philadelphia

Multiple version iconThere are 2 versions of this paper

Date Written: December 6, 2013

Abstract

We present theory and evidence highlighting the role of natural amenities in neighborhood dynamics, suburbanization, and variation across cities in the persistence of the spatial distribution of income. Our model generates three predictions that we confirm using a novel database of consistent-boundary neighborhoods in U.S. metropolitan areas, 1880-2010, and spatial data for natural features such as coastlines and hills. First, persistent natural amenities anchor neighborhoods to high incomes over time. Second, downtown neighborhoods in coastal cities were less susceptible to the suburbanization of income in the mid-20th century. Third, naturally heterogeneous cities exhibit spatial distributions of income that are dynamically persistent.

Keywords: Neighborhood change, suburbanization, locational fundamentals, multiple equilibria

JEL Classification: R23, N90, O18

Suggested Citation

Lee, Sanghoon and Lin, Jeffrey, Natural Amenities, Neighborhood Dynamics, and Persistence in the Spatial Distribution of Income (December 6, 2013). Available at SSRN: https://ssrn.com/abstract=2365778 or http://dx.doi.org/10.2139/ssrn.2365778

Sanghoon Lee (Contact Author)

University of British Columbia (UBC) - Sauder School of Business ( email )

2053 Main Mall
Vancouver, BC V6T 1Z2
Canada

Jeffrey Lin

Federal Reserve Banks - Federal Reserve Bank of Philadelphia ( email )

Ten Independence Mall
Philadelphia, PA 19106-1574
United States

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