Residential Land Use and Utilities of Multiple Generations with Lifespan Perspectives and Demographic Dynamics

Demographic dynamics and spatial distribution of urban amenities bring about spatially different benefits to young, middle-aged, and elderly people, thereby affecting residential location patterns. Using an overlapping generations model in a closed city with two zones with different amenity levels, we demonstrate how young, middle-aged, and elderly generations with lifespan perspectives reside in the two zones with their interplay across periods and locations and analyze the residents’ welfare levels. We find that, unlike a static situation, there is no steady residential pattern in which middle-aged or elderly households live in both of the two zones when they optimize their residential locations throughout their life. Our numerical simulation reveals two findings useful for policy making: first, urban amenities should be unevenly distributed across the city from a perspective of lifetime utility; second, different demographic changes lead to different desirable residential patterns in terms of utility. Finally, we check the robustness of these findings for the case of the expansion of remote work.