Natural Amenities, Neighborhood Dynamics, and Persistence in the Spatial Distribution of Income

Supersedes Working Paper 13-48 and Working Paper 15-46 – Natural Amenities, Neighborhood Dynamics, and Persistence in the Spatial Distribution of Income

Their model generates three predictions that they confirm using a novel database of consistent-boundary neighborhoods in U.S. metropolitan areas, 1880—2010, and spatial data for natural features such as coastlines and hills. First, persistent natural amenities anchor neighborhoods to high incomes over time. Second, naturally heterogeneous cities exhibit persistent spatial distributions of income. Third, downtown neighborhoods in coastal cities were less susceptible to the widespread decentralization of income in the mid-20th century and experienced an increase in income more quickly after 1980.