Essays on urban structure and dynamics

This thesis consists of three essays on urban structure and dynamics. These essays use empirical tools from empirical industrial organization and applied microeconomics to examine how cities grow and change. Access to high-quality local services constitutes an important amenity in residents' valuation of cities. In "Industry dynamics and the value of variety in nightlife: evidence from Chicago", I examine consumer preferences for variety in nightlife to understand these preferences and their impact on nightlife industry dynamics. I develop a structural dynamic model for venue entry and exit in the nightlife industry and estimate the model using a panel of liquor license data from Chicago. I find strong preferences for variety. My results suggest that in equilibrium a new entrant can increase profits for incumbent venues in some cases due to increased demand. However, potential entrants face high barriers to entry. In "Land value gradients and the level and growth of housing prices", coauthor Tom Davidoff and I ask whether urban land rent gradients affect the level and growth of housing rents and prices. We use residential rents and the location of Starbucks stores to proxy for land prices, and calculate a gradient measure that allows for multiple peaks of land rent within a metropolitan area. Our measures of land rent gradients are significantly associated with high and rising prices, and explain some of the cross-sectional variation in prices. However, our measure does not explain the abnormally high rent and prices in Pacific and Northeastern coastal "Superstar Cities." Bartik shocks are widely used as an instrument for local labour demand. A potential concern with this instrument is potential endogeneity in the presence of correlation between city-level industrial composition and the outcome variable of interest. In "A control function approach to the correlated components of Bartik shocks", I formalize this endogeneity concern and introduce a control function correction that, given additional assumptions, addresses the potential endogeneity. I demonstrate the application of this novel approach by estimating a housing supply function.Arts, Faculty ofVancouver School of EconomicsGraduat