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The pure effect of social preferences on regional location choices: The evolving dynamics of convergence to a steady state population distribution

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  • Stark, Oded
  • Budzinski, Wiktor
  • Kosiorowski, Grzegorz

Abstract

This paper tracks the consequences of individuals' desire to align their location with their social preferences. The social preference studied in the paper is distaste for relative deprivation, measured in a cardinal manner. Location is conceived as social space, with individuals choosing to relocate if, as a result, their relative deprivation will be reduced, holding their incomes constant. Conditions are provided under which the associated dynamics reaches a spatial steady state, the number of periods it takes to reach a steady state is specified, and light is shed on the robustness of the steady state outcome. By way of simulation it is shown that for large populations, a steady state of the relocation dynamics is almost always reached, typically in one period, and that cycles are more likely to occur when the populations' income distributions are more equal.

Suggested Citation

  • Stark, Oded & Budzinski, Wiktor & Kosiorowski, Grzegorz, 2019. "The pure effect of social preferences on regional location choices: The evolving dynamics of convergence to a steady state population distribution," University of Tübingen Working Papers in Business and Economics 118, University of Tuebingen, Faculty of Economics and Social Sciences, School of Business and Economics.
    • Handle: RePEc:zbw:tuewef:118
    DOI: 10.15496/publikation-28942
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    References listed on IDEAS

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    1. Kashi Kafle & Rui Benfica & Paul Winters, 2020. "Does relative deprivation induce migration? Evidence from Sub‐Saharan Africa," American Journal of Agricultural Economics, John Wiley & Sons, vol. 102(3), pages 999-1019, May.
    2. Salem, A B Z & Mount, T D, 1974. "A Convenient Descriptive Model of Income Distribution: The Gamma Density," Econometrica, Econometric Society, vol. 42(6), pages 1115-1127, November.
    3. Bruno S. Frey, 2018. "Economics of Happiness," SpringerBriefs in Economics, Springer, number 978-3-319-75807-7, October.
    4. Stark, Oded, 2013. "Stressful Integration," European Economic Review, Elsevier, vol. 63(C), pages 1-9.
    5. Frey, Bruno S & Stutzer, Alois, 2000. "Happiness, Economy and Institutions," Economic Journal, Royal Economic Society, vol. 110(466), pages 918-938, October.
    6. James B. McDonald, 2008. "Some Generalized Functions for the Size Distribution of Income," Economic Studies in Inequality, Social Exclusion, and Well-Being, in: Duangkamon Chotikapanich (ed.), Modeling Income Distributions and Lorenz Curves, chapter 3, pages 37-55, Springer.
    7. Stark, Oded & Taylor, J Edward, 1991. "Migration Incentives, Migration Types: The Role of Relative Deprivation," Economic Journal, Royal Economic Society, vol. 101(408), pages 1163-1178, September.
    8. Michael A. Quinn, 2006. "Relative Deprivation, Wage Differentials and Mexican Migration," Review of Development Economics, Wiley Blackwell, vol. 10(1), pages 135-153, February.
    9. Hyll, Walter & Schneider, Lutz, 2014. "Relative deprivation and migration preferences," Economics Letters, Elsevier, vol. 122(2), pages 334-337.
    10. Stark, Oded & Micevska, Maja & Mycielski, Jerzy, 2009. "Relative poverty as a determinant of migration: Evidence from Poland," Economics Letters, Elsevier, vol. 103(3), pages 119-122, June.
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    Cited by:

    1. Oded Stark & Wiktor Budzinski, 2021. "A social‐psychological reconstruction of Amartya Sen’s measures of inequality and social welfare," Kyklos, Wiley Blackwell, vol. 74(4), pages 552-566, November.

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    More about this item

    Keywords

    Social preferences; Distaste for low relative income; A cardinal measure of income relative deprivation; Interregional locational choices; Relocation dynamics; Steady-state spatial distribution;
    All these keywords.

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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