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The effect of amenities on local wage distributions

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  • Craig Kerr

    (California State Polytechnic University at Pomona)

Abstract

This paper predicts that local wage distributions will contract with an improvement in amenities by imposing structure on the standard model of amenity capitalization with multiple worker types (Roback in Econ Inq 26(1):23–41, 1988). The added structure is Ellickson’s (Am Econ Rev 61(2):334–339, 1971) single-crossing condition, which assumes that the willingness to accept higher housing prices for better amenities increases with income. The model predicts that under empirically plausible conditions, workers at the upper end of the wage distribution will earn less in locations with better amenities while those at the lower end will actually earn more.

Suggested Citation

  • Craig Kerr, 2017. "The effect of amenities on local wage distributions," Letters in Spatial and Resource Sciences, Springer, vol. 10(2), pages 215-228, July.
    • Handle: RePEc:spr:lsprsc:v:10:y:2017:i:2:d:10.1007_s12076-017-0183-0
    DOI: 10.1007/s12076-017-0183-0
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    More about this item

    Keywords

    Amenities; Wage distributions; General equilibrium; Migration;
    All these keywords.

    JEL classification:

    • R0 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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