Residential Location and the Demand for Recreation: a Model for Coastal Cities

Abstract

In trying to analyze the cost and spatial structure of city residences, the classic models of urban economics are for the most part focused on the costs of transportation, which places the greatest emphasis on how far the residence is from the workplace. Recreational accessibility and other amenities, including distance from the beach, have been the focus of many recent studies, and the high cost of beachfront lots along the coastal cities of Brazil, along with the growing demand for recreation, involve a strong relation between price and the access to and/or a view of the beach. The model developed in this study attempts to illustrate the relation between the demand for recreation and the cost of housing in coastal cities of Brazil. Besides, the model intends to explain the relation between residence costs, the size of the residence, outdoor leisure/recreational time, specially at the beach, by means of maximizing individual´s utility. The utility function used is Cobb-Douglas type. Empirical results follow the presentation of the model, discussing two particular situations - those in which the individuals work in the same center and also when they work in different ones. The proposed model adds features to the previous ones allowing different side analyses such as: the demand for services related to recreation/leisure, the definition of urban limits of the city based on the prices families are willing to pay, the consideration of multiple centers of employment, multiple localities for recreation/leisure, along with the considerations of multiple workers in the families.