UC Santa Barbara

The rise of the modern service- and information-based economy has accompanied an

increased concern for quality of life compared to earlier eras. The consumer city hypothesis argues that in a post-industrial society, people increasingly value the location-specific amenities a particular city has to offer when deciding where to live. This is in contrast to traditional wisdom, which holds that jobs are the sole or most important criterion in attracting people to a given place. While other studies have found an association between natural amenities and greater demand for places that have them, there is much less work focusing on whether cultural amenities have the same effect. This analysis aims to discover whether there is additional evidence to support the consumer city hypothesis by investigating the relationship between cultural amenity levels (as measured by employment in amenity-related fields) and demand for particular places (as measured by median home prices).

This study examines 357 Metropolitan Statistical Areas in the United States

(including those in Alaska and Hawaii). Data from the American Community Survey and

the Bureau of Labor Statistics were used to measure amenity-related employment, median home prices, and other demographic variables. Four linear regressions were run to determine the relationship between these variables in the years 2012 and 2005, as well as to discover the predictive value of amenity-related employment for future median home prices and changes in median home prices over time.

The results indicate that higher levels of cultural amenity-related employment are

indeed associated with higher median home prices, providing support for the consumer-city hypothesis. Furthermore, levels of amenity-related employment at one point in time can be strong predictors of median home prices several years later, although they proved less useful for predicting the percentage change in median home values over time. Amenity-related employment may therefore be a potentially useful indicator to consider when predicting median home values. These findings also open up avenues for future research into the applicability of the consumer-city hypothesis in other First World countries as well as the developing world.