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Valuing consumption services as technology transforms accessibility: evidence from Beijing

Author

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  • Chen, Ying
  • Cheshire, Paul
  • Wang, Xiangqing
  • Wang, You-Sin

Abstract

Home delivery reduced the value of cities as locations to access variety in durable consumption goods. Food delivery services (FDS) are doing the same for restaurants. Home-streaming of sports or home-delivered restaurant meals are close but not perfect substitutes for the live experiences. Here we investigate the impact of FDS in Beijing. Employing a Bartik IV strategy, we find that a one standard deviation increase in the number of FDS-accessible restaurants generates a 7.1% increase in property values. The premium is estimated as equivalent to half a top-quality school. FDS appears to be changing how cities deliver welfare from consumption services and so modifies urban land rents and housing attributes. Its value and that of restaurant variety increase with household size but seems to reduce the value of well-equipped kitchens.

Suggested Citation

  • Chen, Ying & Cheshire, Paul & Wang, Xiangqing & Wang, You-Sin, 2024. "Valuing consumption services as technology transforms accessibility: evidence from Beijing," LSE Research Online Documents on Economics 126783, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:126783
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    Keywords

    food delivery services; impact of choice in consumer services; hedonic analysis; changing urban consumption patterns;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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