Wednesday, December 26, 2012

Bagel Quality in Berkeley and the Rise of Consumer Cities

As more New Yorkers move to California, this shifts who is the "median consumer" and provides incentives for stores and restaurants to raise their game in terms of variety and quality. If you don't believe me, then read this case study of bagels in Berkeley.  Joel Waldfogel wrote an important paper about the median consumer and this should be required reading for everyone who cares about cities.    The future of cities is as "consumer cities" as places where people want to live and have a high quality of life. Access to a variety of products is a large piece of quality of life and Amazon can't ship you fresh bagels (even on Amazon Prime!).

This "cute" bagel example highlights a deeper point.   In this age of same day delivery, what parts of Manhattan's quality of life can't be cloned and transplanted elsewhere?   If it all can be cloned and transplanted then will the real estate price premium in Manhattan vanish as you can now enjoy similar amenities in other cities with warmer winters?  What is the scarce input that makes Manhattan great?

Las Vegas has shown that you can clone the Status of Liberty!  Tacky?  Maybe but does the marginal resident care?