How and Why Bohemians, Artists and Gays Affect Regional Housing Values

It is now a conventional wisdom that artistic, bohemian, and gay populations increase housing values in the neighborhoods and communities they inhabit. But these groups are small, and the evidence of their effect on housing prices is anecdotal. We argue that artists, bohemians and gays through two kinds of mechanisms: aesthetic-amenity premium and a tolerance or open culture premium. To examine this, we introduce a combined measure of bohemian and gay populations – the Bohemian-Gay Index. We conduct statistical analysis to test the efficacy and performance of this measure against other variables that are expected to affect housing values: income, wages, technology, and human capital. The findings indicate that the Bohemian-Gay Index has substantial effects on housing values across all permutations of the model and across all region sizes. It remains positive and significant alongside variables for regional income, wages, technology and human capital. The Bohemian-Gay Index also has a substantial direct effect on other key variables, particularly income, and because of that has an additional indirect effect on housing values.