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Wages, Rents, Unemployment, And The Quality Of Life: A Consistent Theory-Based Measure

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  • Matthias Wrede

Abstract

type="main"> 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. We demonstrate that the traditional approach gives too much weight to the wage differential if search frictions are significant. Furthermore, the paper confirms that the wage curve is negatively sloped for quasi-linear utility. Specifically, the wage rate increases and the unemployment rate decreases in response to an increase in the amenity level if the amenity is marginally more beneficial to producers than to consumers.

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  • Matthias Wrede, 2015. "Wages, Rents, Unemployment, And The Quality Of Life: A Consistent Theory-Based Measure," Journal of Regional Science, Wiley Blackwell, vol. 55(4), pages 609-625, September.
  • Handle: RePEc:bla:jregsc:v:55:y:2015:i:4:p:609-625
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    File URL: http://hdl.handle.net/10.1111/jors.12176
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    Cited by:

    1. Zhang, Min & Partridge, Mark & Song, Huasheng, 2018. "Amenities and Geography of Innovation: Evidence from Chinese Cities," MPRA Paper 83673, University Library of Munich, Germany.
    2. Juan Soto & Dusan Paredes, 2016. "Cities, Wages, And The Urban Hierarchy," Journal of Regional Science, Wiley Blackwell, vol. 56(4), pages 596-614, September.

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