Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
983970 | Regional Science and Urban Economics | 2013 | 15 Pages |
Abstract
Urban areas are characterized by dispersed employment patterns and mixed land use. Lucas and Rossi‐Hansberg (LRH) [Econometrica 70 (2002), 1445–1476] develop a model where the urban spatial structure is determined by the external benefits of agglomeration and the commuting costs for workers. This paper reviews and tests implications of the LRH-model for residential rents using semiparametric regression techniques. We show that in mixed urban areas, agglomeration is an important determinant of the rent, while in predominantly residential areas proximity to a business area significantly impacts rents, as is suggested by the theory.
Related Topics
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Authors
Hans R.A. Koster, Jan Rouwendal,