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Wages, Rents, Unemployment, and the Quality of Life

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  • Matthias Wrede

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Abstract

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. Furthermore, the paper shows that the wage curve is negatively sloped for quasi-linear utility. Specifically, the wage rate increases and the unemployment ratio decreases in response to an increase in the amenity level if the amenity is marginally more beneficial to producers than to consumers. As an illustration of the unemployment-adjusted quality-of-life measure, the quality of life in West German counties is estimated.

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File URL: http://www-sre.wu.ac.at/ersa/ersaconfs/ersa13/ERSA2013_paper_00548.pdf
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Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa13p548.

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Date of creation: Nov 2013
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Handle: RePEc:wiw:wiwrsa:ersa13p548

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  1. Winters, John V., 2012. "Differences in Quality of Life Estimates Using Rents and Home Values," IZA Discussion Papers 6703, Institute for the Study of Labor (IZA).
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  16. Chen, Yong & Rosenthal, Stuart S., 2008. "Local amenities and life-cycle migration: Do people move for jobs or fun?," Journal of Urban Economics, Elsevier, vol. 64(3), pages 519-537, November.
  17. Thiess Büttner & Alexander Ebertz, 2007. "Quality of Life in the Regions - Results for German Counties," Ifo Working Paper Series, Ifo Institute for Economic Research at the University of Munich Ifo Working Paper No. 49, Ifo Institute for Economic Research at the University of Munich.
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Cited by:
  1. Hiller, Norbert & Lerbsy, Oliver, 2014. "The capitalization of non-market attributes into regional housing rents and wages: Evidence on German functional labor market areas," CAWM Discussion Papers, Center of Applied Economic Research Münster (CAWM), University of Münster 71, Center of Applied Economic Research Münster (CAWM), University of Münster.

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