National expenditures on local amenities

We develop a framework for estimating Americans’ implicit expenditures on spatially varying nonmarket amenities. We focus on location-specific factors that affect the quality of life but are not formally traded. Examples include climate, geography, pollution, local public goods, and transportation infrastructure. Households pay for residential access to these amenities indirectly, through housing prices, wages and property taxes. We construct a database of 75 amenities, match it to 5 million households’ location choices, and use hedonic methods to estimate their total amenity expenditures. Our benchmark estimate for the year 2000 is $562 billion–equivalent to 8% of Americans’ personal consumption expenditures.