Estimating Benefits from Regional Amenities: Internal Migration and Life Satisfaction

32 Pages Posted: 5 May 2015 Last revised: 7 May 2015

See all articles by Angela Fasshauer

Angela Fasshauer

Kiel Institute for the World Economy

Katrin Rehdanz

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

Date Written: April 1, 2015

Abstract

This paper is the first to link economic theory with empirical life-satisfaction analyses referring to internal migration. We derive an extension of the Roback (1982) model to account for benefits from regional amenities in the utility function, while controlling for income, housing costs, and migration costs. Using highly disaggregated spatial panel information on people’s migration decisions and their life satisfaction for Germany, we provide an empirical investigation of the theoretical model by applying an individual fixed-effects model to rule out selection bias, while accounting for endogeneity of income. We find that short-term benefits from regional amenities represent about 21 percent of household income. These findings are robust to a number of alternative specifications.

Keywords: internal migration, regional amenities, life satisfaction, Germany

JEL Classification: A12, C33, R23

Suggested Citation

Fasshauer, Angela and Rehdanz, Katrin, Estimating Benefits from Regional Amenities: Internal Migration and Life Satisfaction (April 1, 2015). SOEPpaper No. 748. Available at SSRN: https://ssrn.com/abstract=2602695 or http://dx.doi.org/10.2139/ssrn.2602695

Angela Fasshauer (Contact Author)

Kiel Institute for the World Economy ( email )

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

Katrin Rehdanz

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

Register to save articles to
your library

Register

Paper statistics

Downloads
29
Abstract Views
277
PlumX Metrics