Time,hedonic migration,and household production

"A hedonic migration model is developed where regional amenities are viewed as influencing household production within the framework of the new demand theory. The inputs to household production are goods, time and housing. It is shown that economic growth in the economy as a whole will increase the relative attractiveness of regions that are relatively time-saving, in the sense that they have a lower time elasticity of household production. Hence, migration will flow into time saving regions and housing costs in those regions will rise as real GDP grows." The implied geographical focus is on the United States.     

Location choice,life cycle and amenities

Our study proposes a housing location choice model where a household faces a trade‐off between proximity to place of employment and proximity to amenities. We consider subsamples of high amenity cities and low amenity cities and households with and without children. We show that the roles of gender, education, homeownership, household composition, and public transportation vary significantly depending on level of amenities. Households with a female head of household, those with a working spouse and with older children prefer locating closer to downtown amenities. Female workers with and without children locate closer to work, in high and low amenity cities.     

Re-investing in the Built Environment: A Spatial Network Approach

Before launching ambitious and expensive development programmes to induce new regional technology corridors and clusters, it is critical to appreciate existing spatial economic patterns in a region. Initial economic conditions drive location decisions of firms and a labour force such that any changes must intercede onto an existing landscape built for current economic conditions. This work adopts a simple regional economic model to integrate and review traditional and modern urban location theories in order to illustrate the power of initial conditions to determine a final result. A simple spatial dynamic simulation model captures many of the pertinent effects of real estate pricing patterns to frame both opportunities and constraints to re-shape an urban landscape. Attention to 'ground up' spatially correlated location patterns revealed in price data that suggests close attention to strategic zoning can have profound impacts on the success or failure of economic development. Relatively modest policy interventions that carefully utilize existing preferences for urban amenities and concurrent real property investments involve fewer policy risks with potentially more powerful stimulative economic consequences than promised in more ambitious programmes.     

STEADY-STATE LABOR TURNOVER AS OPTIMAL HOUSEHOLD BEHAVIOR*

ABSTRACT. Models of the firm with costly labor turnover and models of migration with location-specific consumption amenities are two standard explanations of the co-existence of persistent wage differentials with extensive labor mobility. Labor turnover models postulate a worker quit function where the quit rate is inversely related to the regional wage differential in the steady state. We use amenity-consumption models of migration to show conditions under which this postulate is consistent with household utility maximization. Our model extends standard amenity-consumption analysis by making the value of amenities contingent on the “state” of the household. These household states are defined in terms of demographic, education, and health characteristics and are assumed to follow a Markov process.     

Women's Empowerment Through Home–based Work: Evidence from India

This article examines the extent to which home–based production in the garment sector of Ahmedabad, India, serves to empower its female participants, defining empowerment in terms of control over enterprise income and decision–making within the household. It places this question within the literatures on resource theory and bargaining models of the household, both of which posit that improved access to resources increases women's power in the household. This study highlights why access to resources may not lead so directly to improvements in women's position in the household in the Indian context. It then discusses why home–based work may be less empowering than sources of work outside of the home. The arguments about the empowerment potential of women's access to resources through home–based work are tested by examining, first, the determinants of control over the income generated by women in home–based garment production and, second, to what extent access to and control over income from this source translates into involvement in decisions which are atypically women's and yet important to their lives. The results provide a better understanding of the potential of home–based work to offer women in urban India a source of economic activity that also can translate into increased intra–household power.     

A Life‐cycle Model of Locational Choice in a Two‐region Economy*

The ability to use the amenities or other characteristics of a location may be a function of the length of time a household has resided in the location. We explore the implications of the hypothesis that the enjoyment of regional amenities depends on the accumulation of amenity‐specific human capital. We establish that the interaction of this human capital with regional wage rates determines life‐cycle locational trajectories. The model explains the timing of moves in the working and retirement periods of life as well as observed heterogeneity in household behavior. Small differences between households may result in dramatically different life‐cycle behavior.     

In the Nature of the Non‐City: Expanded Infrastructural Networks and the Political Ecology of Planetary Urbanisation

This paper proposes extending Urban Political Ecology's (UPE) ideas about the urbanisation of nature in order to include the geographical imprints of expanding, global metabolic flows of matter, energy and capital. It does so through the analysis of Huasco, a small agricultural village in northern Chile that has been overburdened with massive energy undertakings aimed at powering the operations of mines that supply raw materials to international markets. Like the sewage and technological networks that feed the life of cities, the paper argues that Huasco—as a metabolic vehicle of planetary urbanisation—has also been hidden from view, and thus the fetishisation of urban infrastructural networks initially theorised by UPE, has been ratcheted‐up to the global level by the mediating powers of neoliberalising capitalism. Just as the socio‐material arrangements that facilitate the smooth functioning of the modern city and household are riddled with glitches and exclusions, the paper suggests that globally up‐scaled infrastructures reveal even larger contradictions that put into jeopardy the very premises upon which the ongoing commodification of nature is grounded.     

The Effect of Hedonic Migration Decisions and Region-Specific Amenities on Industrial Location: Could Silicon Valley Be in South Dakota?

This paper analyzes the effect of hedonic migration decisions and regional amenities on industrial location. Labor-intensive firms bifurcate into companies that follow the workers completely to the most attractive places, and companies which engage in a trade-off between "following" and "compensation for disamenities." In the latter case, regional amenities induce three distinct location patterns: (a) a concentration of firms where the level of amenities is rapidly changing, (b) a gradual change of industrial composition at intermediate locations, and (c) a concentration of specific industries at the periphery of high-amenity areas. These patterns explain some of the controversial empirical findings about regional amenities and migration.     

SOMETIMES CLOSE IS GOOD ENOUGH: THE VALUE OF NEARBY ENVIRONMENTAL AMENITIES*

ABSTRACT An extensive empirical literature exists, showing that variations in region‐specific amenities can account for persistent differences in real wages across regions. However, this literature has considered only amenities in the same location as the household. This paper argues that environmental amenities at some distance from but accessible to urban areas may lead to negative compensating wage differentials. We use a general equilibrium framework and data from the 1995 Current Population Survey to calculate implicit amenity prices based on measures of distance to environmental amenities. Our results suggest that amenities outside the metropolitan area do generate compensating wage differentials, as workers are willing to accept lower wages to live in accessible proximity to “nice” places. This implies that these places provide a positive externality to those communities that find them accessible. The estimated effects are quantitatively important, suggesting that these externalities should be taken into account in policy making.     

A Conditional Logit Approach to U.S. State-to-State Migration

This paper uses a conditional logit approach to study interstate migration in the United States for each of eleven years, from 1986–1987 to 1996–1997. We test substantive hypotheses regarding migration in the United States and demonstrate the richness of the conditional logit approach in studies of place-to-place migration. We investigate migration responses to relative economic opportunities (unemployment rate, per capita income) and the associated costs of moving (distance between origin and destination and its square). We also investigate how noneconomic factors, such as amenities, affect migration between states through a state fixed effect. Finally, we study the magnitude of unmeasured costs associated with a particular migration. The conditional logit model also allows us to compute various trade-off and other values that are of interest in migration analysis.     

COMPENSATION FOR COMMUTES IN THE LAND AND LABOR MARKETS: SOME EVIDENCE FROM THE TOKYO METROPOLITAN AREA*

ABSTRACT. Recent research suggests that in nonmonocentric cities compensation for commutes takes the form of both lower housing prices and higher wages. This paper develops a random utility model that predicts the probability of an actor choosing to commute between each residence and job in a metropolitan area conditional on the observed location of housing units and job sites. The model allows commuting time, origin-specific amenities, land prices, destination-specific amenities and wages to influence actors' choices. We estimate the model using maximum likelihood and generalized least squares techniques and data on commuting between each of 38 origin and 15 destination jurisdictions in the Tokyo metropolitan area. The empirical results show that, all else equal, a one percent increase in commuting time reduces the probability that a route (origin-destination combination) will be chosen by almost five percent. Origin-specific amenities are not completely capitalized into land prices and destination-specific amenities are not completely capitalized into wages. Desirable residential amenities include school quality and a low ratio of day to night population. Desirable workplace amenities include a large share of white collar jobs and a high density of employment.     

Alan Wilson – contributions to research on population and migration

ABSTRACT

This article reviews Alan Wilson's research on population and migration in the 1970s and the 2010s, which supplements his principal contribution - mathematical modelling of urban and regional systems. In the 1970s, drawing on input-output models of economies and working with Philip Rees, Wilson established the accounting basis for Andrei Rogers' multi-regional projection model, adding international migration. Innovative methods were developed to complete demographic accounts, where there were data gaps. In the 2010s, working with Adam Dennett, Wilson systematized methods for estimating migration flows between regions in Europe, employing his family of spatial interaction models. The key aim of both research strands was to ensure that no information was ignored to ensure consistency in population and migration models. The influence of Wilson's contributions to research on population and migration is traced through a survey of subsequent research.     

THE IMPACT OF REMITTANCES ON REGIONAL CONSUMPTION AND INVESTMENT

This paper examines the effects of international remittances on regional economic development using spatial data from an original household survey carried out in the Republic of Moldova. I analyze remittance flows with a model that estimates regional (urban and rural) budget shares of consumption and investment expenditure categories for rural and urban households. An important contribution of the paper is that it analyzes the effect of remittances in the regions where spending takes place, which is not necessarily the same as the region where the households originating this spending reside. Using the multinomial logit approach, I control for potential selectivity and endogeneity biases of remittances. The results show that remittances lead to significantly increasing marginal productive investments in urban regions at the expense of rural regions. The fundamental finding of the study is that remittances influence the flight of productive capital out of rural areas into urban regions (a pattern similar to the crowding‐out effect of the Dutch Disease). The analysis carried out in this paper can be applied to other temporary income transfers and exogenous spending injected in the region that affect households' regional expenditure patterns.     

THE GEOGRAPHIC DISTRIBUTION OF HUMAN CAPITAL: MEASUREMENT OF CONTRIBUTING MECHANISMS

This paper investigates how the geographic distribution of human capital—measured as college attainment—evolves over time. With U.S. data, I decompose generation‐to‐generation changes in local human capital into three factors: the previous generation's human capital, intergenerational transmission of skills from parents to their children, and migration of the children. I find significant persistence of local skills at the commuting zone (local labor market) level. Labor market size, climate, and local colleges affect local skill measures. Skills move from urban‐to‐rural labor markets through intergenerational transmission but from rural‐to‐urban labor markets through migration.     

Where does all the talent flow? Migration of young graduates and nongraduates,Canada 1996–2001

It has recently been suggested that cities and regions should focus upon attracting talented individuals as a means to develop. Such a suggestion implies two things: first that it is possible to meaningfully alter migration flows by way of local policy, and second that these flows have an effect on local growth (and not the reverse as has generally been admitted). In this paper, we begin to investigate the empirical foundations of such assertions by examining some structural determinants of graduate migration flows by comparing them, in a gravity model context, to flows of nongraduates. Our contention is that, if migration flows are structured by such factors, then policies aimed at modifying flows—and any research purporting to give such policy advice—must first take them into account. We show that migration flows are strongly dependent on basic gravity variables such as size and distance, but that these and other variables (such as income differences, presence of graduates and border effects) do not affect all flows equally. Furthermore, we show that certain factors that are assumed to be local (such as wage levels) in fact only operate at a provincial level. Thus policies implemented locally may have little or no effect if they are manipulating factors that operate at a different scale.     

TESTING THE NEW ECONOMIC GEOGRAPHY: MIGRATIONS AND INDUSTRIAL AGGLOMERATIONS IN SPAIN*

ABSTRACT This paper examines whether access to markets had a significant influence on migration choices of Spanish internal migrants in the interwar years. In it we perform a structural contrast of a New Economic Geography model that focuses on the forward linkage that links workers location choice with the geography of industrial production. The results prove the existence of a direct relation between workers' localization decisions and the market potential of the host regions. This could help to explain the apparently low intensity of internal migrations in Spain until the 1920s as well as its geography.     

Home as a Pocket of Local Order: Everyday Activities and The Friction of Distance

Discourse on the information society currently highlights issues of networks, flows and mobilities as prime organizers and re‐organisers of time—space relationships. Such discourse promotes notions of the flexible use of time and space, of people's decoupling from place and even of the end of geography — the belief that distance does not matter. Yet, in this article we argue that the roles of geographical stationarity and proximity in everyday life — understood as the creation and maintaining of pockets of local order — indicate the continuing and often neglected importance of the friction of distance. We demonstrate this empirically by focusing on the home as a pocket of local order, investigating the intensity and spatial extension of people's everyday activities, projects and contacts — their corporeal, virtual and medial (media‐related) mobilities — with the world outside. We support our thesis with data from the population, household and individual levels.     

Migration and the location of MNE activities: Evidence from Italian provinces

We investigate the migration-inward foreign direct investment (FDI) nexus in narrow geographies. A novel two-stage empirical strategy allows us to investigate the role of migration as a determinant of multinational enterprises (MNEs) location choices and unpick heterogeneity in foreign investors' preferences towards the presence of migrants in the host location. This allows us to shed light on the relative importance of the underlying mechanisms linking migration and inward FDI. Relying on 1113 greenfield investments by 895 MNEs in Italian NUTS3 regions over 2003–2015, we find that immigrants from the country of origin of the investor exert a positive but highly heterogeneous effect on MNE location choices. Investors are more sensitive to the presence of migrants from their country of origin when they lack experience in the destination country (first-time investors) and when their investments concern market-access or business-services (downstream) activities. This is consistent with the view that migrants act as information brokers that bridge the fixed costs of international business activities.     

The assumption of equilibrium in models of migration

In recent articles Evans (1990) and Harrigan and McGregor (1993) (hereafter HM) scrutinized the equilibrium model of migration presented in a 1989 paper by Schachter and Althaus. This model used standard microeconomics to analyze gross interregional migration flows based on the assumption that gross flows are in approximate equilibrium. HM criticized the model as theoretically untenable, while Evans summoned empirical as well as theoretical objections. HM claimed that equilibrium of gross migration flows could be ruled out on theoretical grounds. They argued that the absence of net migration requires that either all regions have equal populations or that unsustainable regional migration propensities must obtain. In fact some moves are inter- and other are intraregional. It does not follow, however, that the number of interregional migrants will be larger for the more populous region. Alternatively, a country could be divided into a large number of small regions that have equal populations. With uniform propensities to move, each of these analytical regions would experience in equilibrium zero net migration. Hence, the condition that net migration equal zero is entirely consistent with unequal distributions of population across regions. The criticisms of Evans were based both on flawed reasoning and on misinterpretation of the results of a number of econometric studies. His reasoning assumed that the existence of demand shifts as found by Goldfarb and Yezer (1987) and Topel (1986) invalidated the equilibrium model. The equilibrium never really obtains exactly, but economic modeling of migration properly begins with a simple equilibrium model of the system. A careful reading of the papers Evans cited in support of his position showed that in fact they affirmed rather than denied the appropriateness of equilibrium modeling. Zero net migration together with nonzero gross migration are not theoretically incompatible with regional heterogeneity of population, wages, or amenities.     

Digital gravity? Firm birth and relocation patterns of young digital firms in Germany

This paper analyses the spatial patterns of young (<10 years) digital firms in Germany between 2008 and 2017 on county level. Determinants of firm birth locations as well as relocations are considered jointly to understand differences in location choices within firms' life cycles. I match commercial register data of 107,321 firms with county-level administrative data to capture local characteristics. Using an OLS model with fixed effects, I find that the local knowledge base—that is, universities, research institutes, and colocated incumbents—are significant key determinants of digital firm birth when controlling for a host of local characteristics. My results indicate that for five firms per 1000 inhabitants, there is around one firm birth. Second, using a fixed effects gravity model for the analysis of relocations, I find that the most dominant explanatory factor for firm relocation across specifications is distance, that is, relocation costs. Relocation flows are more than twice as high to neighboring counties relative to other locations which shows that digital firms are not as footloose as their business model may suggest. Jointly, my results reflect economic activity's regional persistence, particularly for new firms. My paper provides evidence for policies targeting homogenous digital clusters based on strong colocation and that digital economic activity is not shifted over long distances, but the regional entrepreneurship capital is crucial for local growth.