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Social Interaction and Urban Location Decisions

Abstract

This paper examines how household social interaction affects housing and location demand in urban settings. The extended Alonso-Muth urban household model shows that the effects on density and location hinge upon the demand relationship between social activities and housing consumption. Stronger tastes for social activities outside the home lead to lower housing demand and decrease demanded distance from the CBD. Stronger tastes for socializing at home have the opposite effects on housing and location demands. The empirical analysis of interaction survey data yields results consistent with the theoretical framework.

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Notes

  1. Access to the unrestricted data can be found through www.roper.uconn.edu.

  2. Blacks and Hispanics account for 500 respondents each which resulted in an additional 288 blacks and 294 Hispanics to be included in the sample than otherwise would have been.

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Acknowledgements

The authors would like to thank participants at the American Real Estate and Urban Economics Association and Western Economic Association International annual meetings. We also thank an anonymous referee for excellent suggestions. All remaining errors are our own.

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Correspondence to Zackary B. Hawley.

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Hawley, Z.B., Turnbull, G.K. Social Interaction and Urban Location Decisions. J Real Estate Finan Econ 59, 1–26 (2019). https://doi.org/10.1007/s11146-018-9673-0

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  • DOI: https://doi.org/10.1007/s11146-018-9673-0

Keywords

  • Social interaction
  • Endogenous amenities
  • Urban form
  • Housing demand
  • Household location

JEL Classification

  • R14
  • R21
  • C26