Research Fellows Juan Robalino and Roger Madrigal made an important contribution for the Inter-American Development Bank’s project called Quality of Life in Urban Neighborhoods in Costa Rica.
They look at how people value amenities in urban neighborhoods within San Jose. They find that neighborhood amenities explain 39% of the standardized variation of rents. Additionally, they find evidence that there are neighborhoods that are significantly better off than most of the other neighborhoods in the metropolitan area. Some districts (e.g. Mata Redonda) rank very high in housing characteristics but poorly in neighborhood amenities, while other districts (e.g. Escazú) rank poorly in housing characteristics but highly in neighborhood amenities. This shows the potential of indirect policy measures to reduce inequality in urban areas through the improvement of neighborhood amenities. They also consider differences in the way people value amenities by calculating prices in different urban areas. They find that some of the amenity prices change. In more sparse urban areas, Distance to National Parks becomes less important but distance to primary roads becomes more important.