Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/19043 
Year of Publication: 
2005
Series/Report no.: 
CESifo Working Paper No. 1579
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
This paper identifies a new factor, the age of the housing stock, that affects where high- and low-income neighborhoods are located in U.S. cities. High-income households, driven by a high demand for housing services, will tend to locate in areas of the city where the housing stock is relatively young. Because cities develop and redevelop from the center outward over time, the location of these neighborhoods varies over the city's history. The model predicts a suburban location for the rich in an initial period, when young dwellings are found only in the suburbs, while predicting eventual gentrification once central redevelopment creates a young downtown housing stock. Empirical work indicates that if the influence of spatial variation in dwelling ages were eliminated, longstanding central city/suburban disparities in neighborhood economic status would be reduced by up to 50 percent. Model estimates further predict that between 2000 and 2020, central-city/suburban differences in economic status will widen somewhat in smaller cities but narrow sharply in the largest American cities as they become more gentrified.
JEL: 
R14
R00
Document Type: 
Working Paper
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