Housing Prices and Inter-urban Migration
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.
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.:
- Train,Kenneth E., 2009.
"Discrete Choice Methods with Simulation,"
Cambridge University Press, number 9780521766555, December.
- David J. Lewis & Gary L. Hunt & DAndrew J. Plantinga, 2002.
"Public Conservation Land and Employment Growth in the Northern Forest Region,"
University of Wisconsin Press, vol. 78(2), pages 245-259.
- Lewis, David A. & Hunt, Gary L. & Plantinga, Andrew J., 2001. "Public Conservation Land And Employment Growth In The Northern Forest Region," 2001 Annual meeting, August 5-8, Chicago, IL 20748, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Ashenfelter, Orley & Harmon, Colm & Oosterbeek, Hessel, 1999.
"A review of estimates of the schooling/earnings relationship, with tests for publication bias,"
Elsevier, vol. 6(4), pages 453-470, November.
- Ashenfelter, O. & Harmon, C. & Oosterbeek, H., 1999. "A Review of Estimates of the Schooling/ Earnings Relationship, with tests for Publication Bias," Papers 99/20, College Dublin, Department of Political Economy-.
- Orley Ashenfelter & Colm Harmon & Hessel Oosterbeek, 1999. "A Review of Estimates of the Schooling/Earnings Relationship, with Tests for Publication Bias," Working Papers 804, Princeton University, Department of Economics, Industrial Relations Section..
- Orley Ashenfelter & Colm Harmon & Hessel Oosterbeek, 2000. "A Review of Estimates of the Schooling/Earnings Relationship, with Tests for Publication Bias," NBER Working Papers 7457, National Bureau of Economic Research, Inc.
- Gary L. Hunt, 2000. "Alternative Nested Logit Model Structures and the Special Case of Partial Degeneracy," Journal of Regional Science, Wiley Blackwell, vol. 40(1), pages 89-113.
- Jepsen, Christopher & Jepsen, Lisa K., 2009.
"Does home ownership vary by sexual orientation?,"
Regional Science and Urban Economics,
Elsevier, vol. 39(3), pages 307-315, May.
- Painter, Gary & Gabriel, Stuart & Myers, Dowell, 2001.
"Race, Immigrant Status, and Housing Tenure Choice,"
Journal of Urban Economics,
Elsevier, vol. 49(1), pages 150-167, January.
- Paul Cheshire & Stefano Magrini, 2005.
"Population Growth in European Cities: weather matters – but only nationally,"
- Paul Cheshire & Stefano Magrini, 2006. "Population growth in European cities: Weather matters - but only nationally," Regional Studies, Taylor & Francis Journals, vol. 40(1), pages 23-37.
- Paul Cheshire & Stefano Magrini, 2005. "Population Growth in European Cities - Weather Matters, but only Nationally," ERSA conference papers ersa05p12, European Regional Science Association.
- Dahl, Michael S. & Sorenson, Olav, 2010.
"The migration of technical workers,"
Journal of Urban Economics,
Elsevier, vol. 67(1), pages 33-45, January.
- John Kennan & James R. Walker, 2011.
"The Effect of Expected Income on Individual Migration Decisions,"
Econometric Society, vol. 79(1), pages 211-251, 01.
- John Kennan & James R. Walker, 2003. "The Effect of Expected Income on Individual Migration Decisions," NBER Working Papers 9585, National Bureau of Economic Research, Inc.
- Kennan,J. & Walker,J.R., 2003. "The effect of expected income on individual migration decisions," Working papers 7, Wisconsin Madison - Social Systems.
- 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.
- Jordan Rappaport, 2004.
"Moving to Nice Weather,"
Econometric Society 2004 North American Summer Meetings
188, Econometric Society.
- Barry Chiswick & Paul Miller, 2010.
"Occupational language requirements and the value of English in the US labor market,"
Journal of Population Economics,
Springer;European Society for Population Economics, vol. 23(1), pages 353-372, January.
- Chiswick, Barry R. & Miller, Paul W., 2007. "Occupational Language Requirements and the Value of English in the U.S. Labor Market," IZA Discussion Papers 2664, Institute for the Study of Labor (IZA).
- Barry R Chiswick & Paul W Miller, 2007. "Occupational Language Requirements and the Value of English in the US Labor Market," Economics Discussion / Working Papers 07-06, The University of Western Australia, Department of Economics.
- Patrick Bayer & Nathaniel Keohane & Christopher Timmins, 2006.
"Migration and Hedonic Valuation: The Case of Air Quality,"
NBER Working Papers
12106, National Bureau of Economic Research, Inc.
- Bayer, Patrick & Keohane, Nathaniel & Timmins, Christopher, 2009. "Migration and hedonic valuation: The case of air quality," Journal of Environmental Economics and Management, Elsevier, vol. 58(1), pages 1-14, July.
- Paul D. Gottlieb & George Joseph, 2006. "College-To-Work Migration Of Technology Graduates And Holders Of Doctorates Within The United States," Journal of Regional Science, Wiley Blackwell, vol. 46(4), pages 627-659.
- Fernando Ferreira & Joseph Gyourko & Joseph Tracy, 2008.
"Housing busts and household mobility,"
350, Federal Reserve Bank of New York.
- Chan, Sewin, 2001. "Spatial Lock-in: Do Falling House Prices Constrain Residential Mobility?," Journal of Urban Economics, Elsevier, vol. 49(3), pages 567-586, May.
- So, Kim Sui & Orazem, Peter & Otto, Daniel, 2009.
"The Effect of Housing Prices, Wages, and Commuting Time on Joint Residential and Job Location Choices,"
Staff General Research Papers Archive
4050, Iowa State University, Department of Economics.
- Kim S. So & Peter F. Orazem & Daniel M. Otto, 2001. "The Effects of Housing Prices, Wages, and Commuting Time on Joint Residential and Job Location Choices," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(4), pages 1036-1048.
- So, Kim S. & Orazem, Peter F. & Otto, Daniel M., 1998. "The Effects Of Housing Prices, Wages, And Commuting Time On Joint Residential And Job Location Choices," 1998 Annual meeting, August 2-5, Salt Lake City, UT 20779, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Jeanty, P. Wilner & Partridge, Mark & Irwin, Elena, 2010. "Estimation of a spatial simultaneous equation model of population migration and housing price dynamics," Regional Science and Urban Economics, Elsevier, vol. 40(5), pages 343-352, September.
- Holger Sieg & V. Kerry Smith & H. Spencer Banzhaf & Randy Walsh, 2004.
"Estimating The General Equilibrium Benefits Of Large Changes In Spatially Delineated Public Goods,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 45(4), pages 1047-1077, November.
- Holger Sieg & V. Kerry Smith & H. Spencer Banzhaf & Randy Walsh, "undated". "Estimating the General Equilibrium Benefits of Large Changes in Spatially Delineated Public Goods," GSIA Working Papers 2003-07, Carnegie Mellon University, Tepper School of Business.
- 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.
- Gary L. Hunt & Richard E. Mueller, 2002. "A Methodology for Estimating Returns to Skills for Canadian Provinces and U.S. States," Journal of Regional Science, Wiley Blackwell, vol. 42(1), pages 127-143.
- 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 1382-1390, December.
- Engelhardt, Gary V., 2003. "Nominal loss aversion, housing equity constraints, and household mobility: evidence from the United States," Journal of Urban Economics, Elsevier, vol. 53(1), pages 171-195, January.
- Eichman, Henry & Hunt, Gary L. & Kerkvliet, Joe & Plantinga, Andrew J., 2010. "Local Employment Growth, Migration, and Public Land Policy: Evidence from the Northwest Forest Plan," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 35(2), August.
- McGranahan, David A., 1999. "Natural Amenities Drive Rural Population Change," Agricultural Economics Reports 33955, United States Department of Agriculture, Economic Research Service.
- Mueser Peter R. & Graves Philip E., 1995. "Examining the Role of Economic Opportunity and Amenities in Explaining Population Redistribution," Journal of Urban Economics, Elsevier, vol. 37(2), pages 176-200, March.
- Paul S. Davies & Michael J. Greenwood & Haizheng Li, 2001. "A Conditional Logit Approach to U.S. State-to-State Migration," Journal of Regional Science, Wiley Blackwell, vol. 41(2), pages 337-360.
- Roback, Jennifer, 1982. "Wages, Rents, and the Quality of Life," Journal of Political Economy, University of Chicago Press, vol. 90(6), pages 1257-1278, December.
- 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.
- Gary L. Hunt & Richard E. Mueller, 2004. "North American Migration: Returns to Skill, Border Effects, and Mobility Costs," The Review of Economics and Statistics, MIT Press, vol. 86(4), pages 988-1007, November.
- Allen J. Scott, 2010. "Jobs or amenities? Destination choices of migrant engineers in the USA," Papers in Regional Science, Wiley Blackwell, vol. 89(1), pages 43-63, 03.
- Hendershott, Patric H. & Ong, Rachel & Wood, Gavin A. & Flatau, Paul, 2009. "Marital history and home ownership: Evidence from Australia," Journal of Housing Economics, Elsevier, vol. 18(1), pages 13-24, March.
- Cécile Détang-Dessendre & Florence Goffette-Nagot & Virginie Piguet, 2008. "Life Cycle And Migration To Urban And Rural Areas: Estimation Of A Mixed Logit Model On French Data," Journal of Regional Science, Wiley Blackwell, vol. 48(4), pages 789-824.
- Ihlanfeldt, Keith R. & Martinez-Vazquez, Jorge, 1986. "Alternative value estimates of owner-occupied housing: Evidence on sample selection bias and systematic errors," Journal of Urban Economics, Elsevier, vol. 20(3), pages 356-369, November.
When requesting a correction, please mention this item's handle: RePEc:wiw:wiwrsa:ersa11p938. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gunther Maier)
If references are entirely missing, you can add them using this form.