Electronic copy available at: http://ssrn.com/abstract=2558491 UNDERSTANDING URBAN DIVERSITY: OBESITY AS UNOBSERVED HETEROGENEITY STEPHEN POPICK # , AND ANTHONY M. YEZER + January,2015 ABSTRACT. In the substantial literature on migration and interregional labor markets, the focus is on location decisions of homogenous agents who are indifferent among locations. In contrast, this research is concerned with the location of diverse individuals using variation in Body Mass Index (BMI) as an example of economically important unobserved heterogeneity. There are strong a priori reasons to believe thatregional amenity variables are differentially attractive to individuals based on their (BMI). Some of these involve climate and physiological reactions associated with differences in BMI. Spatial differences in BMI have implications for economic analysisbecause they are evidence of variation in individual preferences and productivity. Put another way, this paper demonstrates that differences in amenity result in unobserved heterogeneity, i.e. BMI, of city inhabitants that may have important consequences for preferences, productivity, and performance of the urban economy. Previous studies have neglected the possibility that city populations have such unobserved heterogeneity. # Ph.D. Candidate, Department of Economics, George Washington University + Professor, Department of Economics, George Washington University, <yezer@gwu.edu>