HOUSING PRICE DYNAMICS WITHIN A METROPOLITAN-AREA

This paper analyzes the pattern of house price appreciation in the Bos ton area from 1982 to 1994. The empirical results are consistent with the predictions of a standard urban model in which towns have a fixed set of amenities. The evidence suggests that changes in the cross-sect ional pattern of house prices are related to differences in manufactur ing employment, demographics, new construction, proximity to the downt own, and to aggregate school enrollments. These findings support the v iew that town amenities are not easily replicated or quickly adaptable to shifts in demand, even within a metropolitan area.