Working Paper

The Rising Value of Time and the Origin of Urban Gentrification

Abstract: In recent decades, gentrification has transformed American central city neighborhoods. I estimate a spatial equilibrium model to show that the rising value of high-skilled workers? time contributes to the gentrification of American central cities. I show that the increasing value of time raises the cost of commuting and exogenously increases the demand for central locations by high-skilled workers. While change in the value of time has a modest direct effect on gentrification of central cities, the effect is substantially magnified by endogenous amenity improvement driven by the changes in local skill mix.

Keywords: Gentrification; Value of time; Amenities; Central cities;

JEL Classification: J22; J24; R13;

https://doi.org/10.24149/wp1913

Bibliographic Information

Provider: Federal Reserve Bank of Dallas

Part of Series: Working Papers

Publication Date: 2019-10-31

Number: 1913

Pages: 65 pages