Moving to High Quality of Life
Federal Reserve Bank of Kansas City
FRB of Kansas City Working Paper No. 07-02
The U.S. population has been migrating to places with high perceived quality of life. A calibrated general-equilibrium model shows that such migration follows from broad-based technological progress. Rising national wages increase demand for consumption amenities. Under a baseline parameterization, a place with amenities for which individuals would pay 5 percent of their income grows 0.3 percent faster than an otherwise identical place. Productivity is shown to be a decreasingly important determinant of local population. The faster growth of high-amenity places is considerably strengthened if they have low initial equilibrium population density underpinned by low relative productivity. Places with identical amenities asymptotically converge to an identical population density, regardless of their relative productivity levels. An implication is that the high growth rates of high-amenity localities should eventually taper off.
Number of Pages in PDF File: 35
Keywords: Migration, consumption amenities, quality of life, productivity, urban agglomeration
JEL Classification: O40, R12, R13working papers series
Date posted: April 2, 2007
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo3 in 0.328 seconds