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Federal Reserve Bank of Dallas
Working Papers
The Rising Value of Time and the Origin of Urban Gentrification
Yichen Su
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.


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Yichen Su, The Rising Value of Time and the Origin of Urban Gentrification, Federal Reserve Bank of Dallas, Working Papers 1913, 31 Oct 2019.
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Keywords: Gentrification; Value of time; Amenities; Central cities
DOI: 10.24149/wp1913
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