In this paper we investigate the interaction between the preference for urban heritage – as an exogenous amenity – and the preference for areas with a high concentration of high income households – as an endogenous amenity. We develop a logit‐based sorting model in which different income groups interact
and estimate it for the Amsterdam metropolitan area. Results show that all employed households highly value conservation areas and prefer to live in areas with a high concentration of high income households. We investigate the impact of urban heritage on house prices and welfare through counterfactual simulations. The disappearance of urban heritage would result in a substantially more suburbanized location pattern of the high income households in the Amsterdam metropolitan area, and to lower welfare for all income groups.
van Duijn, M., & Rouwendal, J. (2015). Sorting based on Urban Heritage and Income: Evidence from the Amsterdam Metropolitan Area. (TI Discussion Paper; No. 15-030/VIII). Amsterdam: Tinbergen Institute. Retrieved from here.