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Housing Prices and Inter-urban Migration

Author

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  • Cecile Detang-Dessendre
  • Gary Hunt

    ()

  • Virginie Piguet
  • Andrew Plantinga

Abstract

Understanding the causes and consequences of human migration has long been of interest to urban and regional economists. Empirical studies build on the theoretical results of Roback (1982) and Mueser and Graves (1995) by estimating the effects of wages, housing prices, and amenities on inter-area migration. Findings with respect to amenities are clear (e.g., Rappaport 2007), and household-level studies consistently find that relative wages or incomes increase the probability that a household will select a given location (e.g., Berger and Blomquist 1992). In contrast, the results for housing prices are inconclusive. Studies that include area-level measures (e.g., median housing price for a metropolitan area) find a mix of negative, positive, and insignificant effects on inter-area migration decisions (e.g., Hunt and Mueller 2004). Many migration studies exclude housing price measures. This paper investigates the role of housing prices in influencing inter-urban household migration decisions. An important contribution of the study is the development of a new method for representing housing prices in migration analyses. Following the approach commonly used to model wages in studies of household migration, we identify the form of the utility function for which individual-specific housing prices can be predicted for unselected areas as a function of individual characteristics. Our theoretical results guide the development of an empirical measure of housing costs that accounts for the decision to own or rent and the cost of holding housing capital. We test our housing cost measure using the 2000 PUMS to identify point-to-point migration decisions for a large sample of college-educated males residing in 291 U.S. metropolitan areas. We estimate conditional logit models of metropolitan area choice, controlling for wages, a large range of amenities, and expected housing costs. Our key finding is that our proposed housing cost measure yields the expected results (higher housing prices reduce the probability that an area is selected), which is robust to alternative specifications and samples. We re-estimate our model using three alternative metropolitan area measures of housing costs: median house price, average apartment rent, and average urban land rent. We find that these measures consistently yield counterintuitive results.

Suggested Citation

  • Cecile Detang-Dessendre & Gary Hunt & Virginie Piguet & Andrew Plantinga, 2011. "Housing Prices and Inter-urban Migration," ERSA conference papers ersa11p938, European Regional Science Association.
  • Handle: RePEc:wiw:wiwrsa:ersa11p938
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    2. Michael Klien, 2016. "Österreich 2025 – Perspektiven einer regional differenzierten Wohnungs- und Verkehrspolitik vor dem Hintergrund des demographischen Wandels in Österreich," WIFO Monatsberichte (monthly reports), WIFO, vol. 89(11), pages 799-808, November.
    3. Cattivelli, Valentina, 2020. "Planning peri-urban areas at regional level: The experience of Lombardy and Emilia-Romagna," MPRA Paper 101189, University Library of Munich, Germany.
    4. Jaewon Lim, 2017. "Out-migration from the epicenters of the housing bubble burst during and in the aftermath of the Great Recession in the USA," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 59(2), pages 297-319, September.
    5. Jin Hu & Xuelei Xiong & Yuanyuan Cai & Feng Yuan, 2020. "The Ripple Effect and Spatiotemporal Dynamics of Intra-Urban Housing Prices at the Submarket Level in Shanghai, China," Sustainability, MDPI, Open Access Journal, vol. 12(12), pages 1-1, June.
    6. Siqi Zheng & Xiaonan Zhang & Weizeng Sun & Chengtao Lin, 2019. "Air pollution and elite college graduates’ job location choice: evidence from China," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 63(2), pages 295-316, October.
    7. Richard J. Cebula & Maggie Foley & Joshua C. Hall, 2016. "Freedom and gross in-migration: an empirical study of the post-great recession experience," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 40(2), pages 402-420, April.
    8. H. Allen Klaiber & Joshua K. Abbott & V. Kerry Smith, 2017. "Some Like It (Less) Hot: Extracting Trade-Off Measures for Physically Coupled Amenities," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 4(4), pages 1053-1079.
    9. Cho, Cheol-Joo, 2017. "The displacement and attraction effects in interurban migration: An application of the input-output scheme to the case of large cities in Korea," Economics Discussion Papers 2017-49, Kiel Institute for the World Economy (IfW).
    10. Richard Cebula, 2014. "The Impact of Economic Freedom and Personal Freedom on Net In-Migration in the U.S.: A State-Level Empirical Analysis, 2000 to 2010," Journal of Labor Research, Springer, vol. 35(1), pages 88-103, March.
    11. Patricia Abelairas-Etxebarria & Inma Astorkiza, 2020. "Space-Time Analysis of Migrations, Employment, and Housing as A Basis for Municipal Sustainable Urban Planning," Sustainability, MDPI, Open Access Journal, vol. 12(6), pages 1-1, March.
    12. Chigusa Okamoto, 2019. "The effect of automation levels on US interstate migration," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 63(3), pages 519-539, December.

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    More about this item

    JEL classification:

    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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