Spohie Calder-Wang, University of Pennsylvania

Understanding how housing markets price neighborhood amenities is key to unpacking socioeconomic disparities. Yet prior approaches to amenity pricing have suffered from the key confounder of unmeasured neighborhood quality, often leading to wrong-signed estimates. In this paper, we develop a novel proxy-based method that allows us to better estimate the price of housing amenities in the midst of unobserved neighborhood quality. Using detailed migration data, we construct an innovative measure of locational desirability–Geographic PageRank–to use as the proxy variable for quality. We show that this new approach can successfully correct the “wrong-signed” problem in the amenities valuation literature when applied to a standard measure of environmental air quality. The estimated amenity prices are key inputs to evaluating the returns to investment in local public goods or environmental policies, including their roles in reducing housing disparities.

DATE: Friday, April 28, 2023

TIME: 3:30-5:00 p.m.

LOCATION: Fronczak 444