No abstract

No abstract

In this paper I examine the relationship between city and suburban growth over the last three decades for a sample of U.S. metropolitan areas. I develop a structural empirical model relating city income growth to suburban growth in income, population, and house values. The model allows for bidirectional effects of cities on suburbs and suburbs on cities, as well as for unobserved factors affecting both city and suburbs. The simultaneous, latent-variable model is identified using a combination of exclusion and covariance restrictions. Instrumental estimation results indicate that income growth in large cities enhances suburban growth; but income growth in small cities has little effect.

In this paper, we examine the importance of accessibility to employment and transportation system attributes for residential location choice, car ownership and house values. Using the 1980 Census of Housing and Journey to Work data merged with transportation system data, we find strong evidence of residential sorting based on employment location. We find that suburban areas with good commuter rail access to the CBD have significantly greater fractions of their labor force working in the CBD, own fewer cars and have higher house prices than similar neighborhoods and houses in census tracts without service. The house value premium is over 6.4%. Copyright American Real Estate and Urban Economics Association.