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Compensating differentials and evolution of the quality-of-life among U.S. states

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Author Info
Stuart A. Gabriel
Joe P. Mattey
William L. Wascher

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Abstract

This paper provides the first application of the compensating differential paradigm to the evaluation of the extent and sources of evolution in quality-of-life among U.S. states. In addition to providing estimates of quality-of-life rankings for U.S. states over the 1981-1990 period, we use estimated implicit prices on place-specific amenities to calculate the contributions of various factors to evolution in the quality-of-life. Our findings indicate that the quality-of-life rankings are relatively stable across model specifications and over time for certain poorly ranked, densely-populated midwestern and eastern industrial states and for many high quality-of-life rural western states. However, we also find evidence of a substantial deterioration in the quality-of-life in some states that experienced rapid population growth during the decade, with reduced spending on highways and increased traffic congestion and air pollution accounting for the bulk of the deterioration in quality of life in these states. In contrast, states exhibiting an improvement in the quality-of-life rankings ascended for a variety of reasons, including reduced state and local government income tax burdens, improved air quality, increased highway spending, and reduced commute times.

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Paper provided by Federal Reserve Bank of San Francisco in its series Working Papers in Applied Economic Theory with number 96-07.

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Date of creation: 1996
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Handle: RePEc:fip:fedfap:96-07

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Keywords: Quality of life Housing Wages Cost and standard of living

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Stuart A. Gabriel & Joe P. Mattey & William L. Wascher, 1995. "The demise of California reconsidered: interstate migration over the economic cycle," Economic Review, Federal Reserve Bank of San Francisco, pages 30-48. [Downloadable!]
  2. James M. Poterba, 1992. "House Price Dynamics: The Role of Tax Policy and Demography," NBER Reprints 1706, National Bureau of Economic Research, Inc.
  3. Berger, Mark C. & Blomquist, Glenn C., 1992. "Mobility and destination in migration decisions: The roles of earnings, quality of life, and housing prices," Journal of Housing Economics, Elsevier, vol. 2(1), pages 37-59, March. [Downloadable!] (restricted)
  4. David Card & Alan Krueger, 1990. "Does School Quality Matter? Returns to Education and the Characteristics of Public Schools in the United States," Working Papers 645, Princeton University, Department of Economics, Industrial Relations Section.. [Downloadable!]
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  5. Gyourko, Joseph & Tracy, Joseph, 1991. "The Structure of Local Public Finance and the Quality of Life," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 774-806, August. [Downloadable!] (restricted)
  6. Greenwood, Michael J, et al, 1991. "Migration, Regional Equilibrium, and the Estimation of Compensating Differentials," American Economic Review, American Economic Association, vol. 81(5), pages 1382-90, December. [Downloadable!] (restricted)
  7. Blomquist, Glenn C & Berger, Mark C & Hoehn, John P, 1988. "New Estimates of Quality of Life in Urban Areas," American Economic Review, American Economic Association, vol. 78(1), pages 89-107, March. [Downloadable!] (restricted)
  8. Roback, Jennifer, 1982. "Wages, Rents, and the Quality of Life," Journal of Political Economy, University of Chicago Press, vol. 90(6), pages 1257-78, December. [Downloadable!] (restricted)
  9. Gary Hunt, 1993. "Equilibrium and Disequilibrium in Migration Modelling," Regional Studies, Taylor and Francis Journals, vol. 27(4), pages 341-349, January. [Downloadable!] (restricted)
  10. repec:fth:prinin:265 is not listed on IDEAS
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Leven, Charles, 1999. "Methodological Issues in Adjusting Earnings for Quality of Life Differences among Locations," ERSA conference papers ersa99pa096, European Regional Science Association. [Downloadable!]
  2. Stuart A. Gabriel & Joe P. Mattey, 1996. "Leaving Los Angeles: migration, economic opportunity and the quality-of-life," Working Papers in Applied Economic Theory 96-10, Federal Reserve Bank of San Francisco. [Downloadable!]
  3. Berger, Mark C. & Blomquist, Glenn C. & Peter, Klara Sabirianova, 2003. "Compensating Differentials in Emerging Labor and Housing Markets: Estimates of Quality of Life in Russian Cities," IZA Discussion Papers 900, Institute for the Study of Labor (IZA). [Downloadable!]
  4. Shelby Gerking, 1998. "Spatial economic aspects of the environment and environmental policy: New directions for research," ERSA conference papers ersa98p384, European Regional Science Association. [Downloadable!]
  5. Fredrik Carlsen & Jørn Rattsø & Bjørg Langset & Lasse Stambøl, 2006. "Using survey data to study capitalization of local public services," Working Paper Series 8106, Department of Economics, Norwegian University of Science and Technology. [Downloadable!]
  6. John Krainer, 1999. "Real estate liquidity," Economic Review, Federal Reserve Bank of San Francisco, pages 14-26. [Downloadable!]
  7. Stuart A. Gabriel & Joe P. Mattey & William L. Wascher, 1999. "House price differentials and dynamics: evidence from the Los Angeles and San Francisco metropolitan areas," Economic Review, Federal Reserve Bank of San Francisco, pages 3-22. [Downloadable!]
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