WAGES,RENTS, UNEMPLOYMENT,AND THE QUALITY OF LIFE: A CONSISTENT THEORY‐BASED MEASURE

Combining a spatial equilibrium model with a search‐matching unemployment model, this paper analyzes the willingness to pay for regional amenities and the regional quality of life when wages, rents, and unemployment risk compensate for local amenities and disamenities. The results are compared with those obtained from the Rosen‐Roback approach. We demonstrate that the traditional approach gives too much weight to the wage differential if search frictions are significant. Furthermore, the paper confirms that the wage curve is negatively sloped for quasi‐linear utility. Specifically, the wage rate increases and the unemployment rate decreases in response to an increase in the amenity level if the amenity is marginally more beneficial to producers than to consumers.     

AMENITIES VERSUS LABOR MARKET OPPORTUNITIES: CHOOSING THE OPTIMAL DISTANCE TO MOVE*

ABSTRACT. A recent debate in the regional economics literature has focused attention on the motivation behind an individual's decision to migrate. Human-capital migration models emphasize labor market disequilibria whereas alternative (hedonic) migration models stress households’altered demand for nontraded goods. In this paper, we test the relative importance of these two possible motivations for moving between metropolitan areas. We use an intercity hedonic model to decompose wages into equilibrium and disequilibrium components. We then compare the separate influences of amenities and the disequilibrium component of wages on the distance moved between two metropolitan areas. Our findings indicate that both economic factors and amenity differentials are significant factors in explaining regional migration.     

A dynamic model of regional population growth and decline

"This paper presents a two-sector dynamic model of regional population change. The model contains a migration equation, an earnings equation, and an amenity equation for each region. In the context of this model, migration is seen as a disequilibrium process through which the regional populations move towards equilibrium positions. Migration occurs when one region is perceived to be superior to the other on the basis of its earnings and amenity levels. Equilibrium is achieved when population movements between the regions eliminate any differences in their relative attractiveness. A comparative-static analysis of the model is presented to analyze the effects of policy changes and exogenous shocks on the distribution of population among the regions." The geographical focus is on the United States.     

On the role of amenities in models of migration and regional development

"The role of location-specific amenities in human migration decisions, and subsequently regional development, is explored. A framework is developed which motivates a new assessment of existing alternative models of regional development, indicating the need for additional modeling efforts which focus upon amenities as critical elements in such analyses. The approach hinges upon the notion that amenity values are capitalized into wages, rents, or other local prices. This process of capitalization enables researchers to explore the implicit value that society places upon amenities, which can then be used in assessing future regional-development trends in a more comprehensive manner."     

An equilibrium model of gross migration

ABSTRACT The paper presents and tests a new model of migration which differs significantly from the conventional disequilibrium approach. We show that variations in rates of gross migration across regions are equilibrium responses to variations in levels of amenities, governmental policies, etc. The model is tested using data on the gross migration of whites, 1975-80, together with amenities such as climate and with economic variables such as government services, taxes and unionization. Empirical results suggest that the equilibrium model is more consistent with actual migration patterns than is the conventional disequilibrium approach. We estimate compensating differentials and migration elasticities for these variables.     

The assumption of equilibrium in the analysis of migration and interregional differences: a review of some recent research

"This paper questions the plausibility of the assumption of interregional equilibrium in recent research into migration and the valuation of amenities in the United States. It is shown that it is difficult to develop a satisfactory explanation for continuing net migration which is compatible with the equilibrium assumption, and that recent relevant research generally fails to support the idea that the U.S. economy is in equilibrium. The association of higher rent levels with in-migration is explained as a short-run phenomenon. If the spatial economy is in disequilibrium, then the valuations of amenities assuming equilibrium will be biased, being probably too low in areas of net in-migration and too high in areas of net out-migration."     

Consumer city

Urban economics has traditionally viewed cities as having advantagesin production and disadvantages in consumption. We argue thatthe role of urban density in facilitating consumption is extremelyimportant and understudied. As firms become more mobile, thesuccess of cities hinges more and more on cities' role as centresof consumption. Empirically, we find that high amenity citieshave grown faster than low amenity cities. Urban rents havegone up faster than urban wages, suggesting that the demandfor living in cities has risen for reasons beyond rising wages.The rise of reverse commuting suggests the same consumer cityphenomena.l     

SENIOR MIGRATION: SPATIAL CONSIDERATIONS OF AMENITY AND HEALTH ACCESS DRIVERS*

This paper extends the literature on amenity migration by focusing on healthcare access for later‐life migrants. Previous studies have strongly suggested that natural amenities are strong pull factors for later‐life migrants, but high natural amenity counties rarely possess the quality healthcare access optimal for elderly migrants. Utilizing a spatial Bayesian estimation strategy, we explicitly consider numerous drivers of later‐life migration to examine the extent to which health access is a driver in location decisions. We find healthcare access measures, including hospital expenditures, hospital beds, and number of doctors, are positively associated with later‐life migration decisions.     

Equilibrium and disequilibrium perspectives on regional labor migration

Some alternative models of labor migration in the United States are reviewed, with particular reference to the distinction between equilibrium and disequilibrium models of migration. The authors propose alternative tests to a model developed by Joseph Schacter and Paul G. Althaus "which explicitly recognize the stock-flow interactions between net migration and the distribution of regional population stocks and which make a clean distinction between equilibrium in the temporal and in the market-clearing sense."     

Types and Patterns of Later-life Migration

This paper refines previous typologies of later-life mobility by explicitly evaluating the spatial migration patterns and household characteristics of retired American migrants. Migrants' lifecourse attributes (economic status, disability, presence of spouse), large-scale migration patterns (internal migration) and household characteristics (living arrangements, economic independence, residential independence) are used to identify three types of post-retirement mobility. The first type, amenity migration , has a distinctive spatial pattern that suggests a search for attractive climate and leisure amenities. The second type of mobility, assistance migration , can be traced to low income and the absence of a spouse in the household. It often results in residential and economic dependence – specifically, in co-residence with adult children or other labor force members. The third type of mobility, migration in response to severe disability and spouse absence , tends to result in nursing home residence. While amenity migration has long been associated with good health and favorable economic status, this analysis reveals that many disabled and lower-income retirees share the inmigration pattern typical of amenity migrants. In fact, amenity migration is the predominant type of mobility among those migrants with fewer than two unfavorable lifecourse attributes (low income, severe disability and spouse absence). Unlike previous lifecourse typologies, this study shows no clear relationship between moderate disability and co-residence with adult children. The results suggest that co-residence is primarily a strategy for reducing living costs rather than a means of coping with moderate disability.     

VALUING AMENITIES AND DISAMENITIES OF URBAN SCALE: CAN BIGGER BE BETTER?*

ABSTRACT. Considerable effort has been devoted within the recent literature to the valuation of urban amenities and disamenities, as well as to econometric procedures required for the estimation of their implicit market “prices.” This study questions the equilibrium conditions invoked within this literature to derive estimates of marginal willingness to pay, conditions premised upon “perfect” labor mobility among cities. It is shown that such assumptions need not be invoked if one considers the amenity price-mobility relationship directly. This is accomplished by appending a binary migration model to a first-stage wage equation, a procrdure that provides estimates of willingness to pay that can diverge from market-determined implicit prices. Comparison of such values yields important information on the adequacy of market compensation for disamenities (amenities) throughout metropolitan areas.     

Apartment Rents: Another Challenge to the Monocentric Model

Extension of hedonic modeling strategy to the case of apartment rents in the Dallas region reveals the influence of a complex network of activity centers and highway axes. Nodes other than the CBD exert greater influence on rents than the CBD and amenity variables and externalities have both positive and negative effects. These findings demand reevaluation of the place normally assigned to higher-density rental housing in urban models.     

Employment Opportunities,Wages and International Migration in Sweden 1970–1989

In this study I focus on the impact of aggregate labor turnover and regional labor market conditions on gross in- and out-migration within the framework of a neoclassical flexible-wage (equilibrium) model and a fixed-wage (labor-market disequilibrium) model. Using annual panel data on internal gross migration flows in Sweden from 1970 to 1989, I find that regional differences in employment opportunities have the expected effects on migration. The empirical relationship between real wages and gross migration flows is found to be less congruent with theory implications, indicating that compensated regional income prospects are equalized primarily via the interaction between employment opportunities and gross migration flows. Cyclical changes in hirings are shown to have a robust and strongly significant positive scale effect on migration.     

IF YOU CANNOT TAKE THE HEAT,GET OUT OF THE CERRADO … RECOVERING THE EQUILIBRIUM AMENITY COST OF NONMARGINAL CLIMATE CHANGE IN BRAZIL*

ABSTRACT This paper presents an empirical technique for valuing large changes in nonmarketed local attributes (e.g., climate amenities) without data describing prices of locally traded commodities like housing. A model of endogenous sorting is used to identify individuals' indirect utility functions, from which the value of the change in the local attribute is recovered while accounting for equilibrium impacts on markets for labor and locally traded commodities. Annual amenity costs of Brazilian climate change are estimated to be between $1.6 and $8.1 billion for a moderate climate change scenario, depending upon the role of migration costs.     

Regional labor markets and the household migration decision

"The current work extends the modeling of the household migration decision to take into account location-specific influences and relates these to regional wage differentials. This allows for more complete analysis of real wage gains or losses associated with migration and inferences regarding the nature of equilibrium or disequilibrium wage differentials between regions." Data are from the Michigan Panel Study of Income Dynamics for the period 1976-1978. "The results indicate systematic and often substantial influences of household location on the nominal wage and on both job and residence mobility. Based on these findings, comparisons of wage growth patterns are made for those changing jobs and region of residence status. Although compared to other households the wage growth of these migrants is on average lower before migration and higher after migration, the analysis provides no support for arguments that nominal regional wage differentials reflect systematic ordering of real wage differentials. This finding suggests that real wage gains are closely tied to the interregional migration decision but are not related to regional nominal wage differentials in a simple fashion."     

The Amenity Complex: Towards a Framework for Analysing and Predicting the Emergence of a Multifunctional Countryside in Australia

There is growing consensus among academics, regional development organisations and rural communities that the future growth and development of rural regions is increasingly dependent upon their ability to convey, to both established and prospective residents, the ‘amenity’ of their local physical, social and economic environments. However, little research to date has sought to identify exactly what comprises ‘amenity’ in the rural context, or has examined how this conceptually slippery quality is distributed across rural Australia, or how it influences local demographic, socio‐economic and land use change. This paper attempts a broad scale investigation of rural amenity in the south‐east Australian ecumene, identifying its core components in this context, mapping its distribution and assessing the nature of its influence over in‐migration rates over the past three decades. The paper finds that, at a macro‐scale, amenity tends to follow a general gradient from high to low according to distance from the coast, and that its relationship with in‐migration rates has increased substantially between 1976–1981 and 1996–2001.     

An Analysis of Migration Streams for the Canadian Regional System, 1952–1983 1. Migration Probabilities

This is part one of a two-part series that seeks to specify the factors and processes contributing to aggregate change in the Canadian population distribution over the recent past. In part one, we use a model of migration probabilities to identify socioeconomic factors that explain the observed interregional migration flows. In part two, we use an adjustment process for our regional population system to calculate equilibrium population distributions. The estimated migration probabilities of part one are essential for this calculation, thus linking equilibria with the socioeconomic factors previously identified. Disequilibrium, defined as the difference between observed and equilibrium population distributions, is then used to infer relative growth and decline tendencies in the system. We examine and justify our results in the larger context of contemporary Canadian history.     

An Analysis of Migration Streams for the Canadian Regional System, 1952–1983: 2. Disequilibrium

This is part two of a two-part series that seeks to specify the factors and processes contributing to aggregate change in the Canadian population distribution over the recent past. In part one, we use a model of migration probabilities to identify socioeconomic factors that explain the observed interregional migration flows. In part two, we use an adjustment process for our regional population system to calculate equilibrium population distributions. The estimated migration probabilities of part one are essential for this calculation, thus linking equilibria with the socioeconomic factors previously identified. Disequilibrium, defined as the difference between observed and equilibrium population distributions, is then used to infer relative growth and decline tendencies in the system. We examine and justify our results in the larger context of contemporary Canadian history.     

Migration and implicit amenity markets: does incomplete compensation matter?

We first develop an empirical approach for generating measuresof wage over or under compensation (incomplete compensation)for location attributes. We then devise a method to test whethermigration is influenced by incomplete compensation in wagesfor location characteristics. An intercity wage regression isestimated where fixed effects capture the impact of site characteristicson wages. We then regress the fixed effects on a comprehensivevector of site attributes, where the residuals from this stagecapture incomplete compensation in wages. The derived measuresof incomplete compensation are included in a standard microdata-baseddiscrete choice model of migration. The results suggest thatincomplete wage compensation for site characteristics mattersin migration decisions, and the findings are consistent withtendencies toward spatial equilibrium in the distribution ofpopulation.     

Estimating Relative Standard of Living in the United States Using Cross-Migration Data

A new estimator links migration data to a random utility "voting with your feet" model to compare the relative living standards of pairs of regions. It is argued that this estimator has a firmer theoretical basis and uses migration information more efficiently than previous methods. An algorithm converts pairwise comparisons into rankings of the U.S. states for 1970, 1980, and 1990. The rankings indicate living standards were highest in the Northwest (1970, 1980) and the south Atlantic coast (1990). A nonparametric test suggests that the system was in disequilibrium in 1980 (probably due to energy price shocks), but near equilibrium in 1970 and 1990.