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Wages, rents, unemployment, and the quality of life

Listed author(s):
  • Wrede, Matthias

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: https://www.econstor.eu/bitstream/10419/59572/1/718215222.pdf
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Paper provided by Friedrich-Alexander University Erlangen-Nuremberg, Institute for Economics in its series FAU Discussion Papers in Economics with number 01/2012 [rev.].

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Date of creation: 2012
Handle: RePEc:zbw:iwqwdp:012012r
Contact details of provider: Web page: https://www.iwf.rw.fau.de/

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  13. 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.
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  18. Christopher A. Pissarides, 2000. "Equilibrium Unemployment Theory, 2nd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262161877, July.
  19. John Winters, 2013. "Differences in quality of life estimates using rents and home values," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 51(2), pages 377-409, October.
  20. Lee, Chul-In, 2008. "Migration and the wage and unemployment gaps between urban and non-urban sectors: A dynamic general equilibrium reinterpretation of the Harris-Todaro equilibrium," Labour Economics, Elsevier, vol. 15(6), pages 1416-1434, December.
  21. 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.
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