This paper shows that social acceptance of same-sex couples affects their location decisions, especially those with college degrees, resulting in higher educational sorting of same-sex couples across cities. I derive the mean utility of each city from a conditional logit model of location choice, separately for same-sex couples with and without college degrees and different-sex couples with and without college degrees. I then run a regression of the mean utility on acceptance for each group to see the effect of acceptance on location choices. To deal with endogeneity from the simultaneity between acceptance and the location choice of same-sex couples, I use a novel instrument based on the historical number of churches. I find that acceptance has a substantial impact on the location choices of college-educated same-sex couples. Counterfactual analysis suggests significant implications for productivity in an area and the welfare of same-sex couples.
In the United States, same-sex couples disproportionately live in central cities of metropolitan areas, and their presence has often been reported as an indicator of imminent gentrification. In this paper, I suggest two mechanisms that attract same-sex couples into central cities: smaller income elasticity of housing demand and different preferences for downtown/suburban amenities including child-related amenities and cultural tolerance. Analysis based on American Community Survey data provides evidence for these mechanisms. Further analysis using a shift-share instrument shows that metropolitan areas with a higher initial share of same-sex couples downtown experienced a larger increase in average individual income downtown between 2010 and 2017.