Are Regional Differences in Utility Eliminated Over Time? Evidence from Germany

15 Pages Posted: 13 Feb 2008

See all articles by David J. Maddison

David J. Maddison

University College London - Department of Economics

Katrin Rehdanz

University of Kiel; University of Hamburg - Centre for Marine and Climate Research (ZMK); Kiel Institute for the World Economy

Date Written: April 2007

Abstract

Hedonic theory assumes that changes in land prices and wage rates eliminate the utility advantages of differing locations. Using happiness data from the German socio-economic panel this paper empirically tests whether regional utility differences exist and if so whether utility levels show any tendency to converge over time. Empirical analysis reveals substantial differences in utility over different regions of Germany. Analysing a panel of data indicates that even if individual utility levels are at any one moment in disequilibrium they are rapidly converging over Germany for all types of individuals.

Keywords: Convergence, Hedonic Analysis, Happiness, Migration, Germany

Suggested Citation

Maddison, David J. and Rehdanz, Katrin, Are Regional Differences in Utility Eliminated Over Time? Evidence from Germany (April 2007). SOEP Paper No. 16. Available at SSRN: https://ssrn.com/abstract=1092835 or http://dx.doi.org/10.2139/ssrn.1092835

David J. Maddison

University College London - Department of Economics ( email )

Gower Street
London WC1E 6BT, WC1E 6BT
United Kingdom

Katrin Rehdanz (Contact Author)

University of Kiel ( email )

Olshausenstr. 40
D-24118 Kiel, Schleswig-Holstein 24118
Germany

University of Hamburg - Centre for Marine and Climate Research (ZMK) ( email )

Troplowitzstrasse 7
D-22529 Hamburg
Germany

Kiel Institute for the World Economy ( email )

P.O. Box 4309
Kiel, D-24100
Germany

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