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Abstract:

cover
SERC/Urban and Spatial Programme Discussion Paper
Urbanity
Gabriel M. Ahfeldt
May 2013
Paper No' SERCDP0136:
Full Paper (pdf)

JEL Classification: R20; R30


Tags: amenities; consumer city; hedonic analysis; photography geography; property prices

I define a composite amenity that provides aesthetic and consumption value to local residents: Urbanity. A novel data set of geo-tagged photos shared in internet communities serves as a proxy for urbanity. From the spatial pattern of house prices and photos I identify the value of urbanity in two of the largest cities in Europe: Berlin and London. I find an elasticity of indirect utility with respect to urbanity of about 1%. The aggregated willingness-to-pay equates to about $1bn per year in each city. The results demonstrate the important role cities play as centers of leisure, consumption, and beauty.