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Abstract for:

The Role of Education for Amenity Based Sorting in British Cities

Luisa  Gagliardi,  Teresa  Schlüter,  September 2015
Paper No' SERCDP0184: | Full paper (pdf)
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Keywords: Neighborhood Characteristics, Sorting, Amenities, Skills, Local Labour Markets, Hedonic Pricing

JEL Classification: R23; R22; J24

Is hard copy/paper copy available? YES - Paper Copy Still In Print.
This Paper is published under the following series: SERC Discussion Papers
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This paper investigates the relation between amenities and skills by looking at the sorting behavior of skilled individuals across neighbourhoods within British cities. Using a detailed micro dataset on housing transactions we recover a composite measure of local amenities that captures the level of attractiveness of each neighbourhood. By combining the amenity measure with data on British individuals we analyse how the cost associated with the consumption of amenities is distributed across education groups and across neighborhoods within cities defined as integrated labour markets. Results show that, holding constant the availability of job opportunities, high skilled individuals exhibit a moderate preference bias towards amenity consumption as they tend to sort into more attractive neighborhoods than lower skilled individuals with the same income.