Much
of my professional output has been in the area of urban/regional economics.
The main analytical thread running through most of the papers below is
really quite simple. I had just moved from Arizona to Chicago when
I faced the task of trying to figure out how big Chicago would be in the
future (in order to know what the important local benefits are of an environmental
improvement, one needs to know how many people will experience that improvement;
i.e. cleaning up a polluting plant surrounded by six million people has
roughly twice the local benefits as cleaning up that same plant
in a city of three million).
At any rate, in discussions
with people in Arizona, it had become clear to me that the warm climate
was the main reason people had moved there. Since migration was the
big unknown determinant of how rapidly Chicago would get either bigger
or smaller, I checked out what economists had to say about migration.
What I found was quite startling. Economists were attempting to explain
the growth or decline of regions and urban areas by variations in income
levels and in unemployment rates--with no reference at all (or scarcely
any) to climate or other amenities that affect our well-being.
These explanations had depressingly little "explanatory power." (they
could not explain a high percentage of the variation in migration rates
observed among cities). The reason such equations were used is that
a demand-side approach was being used. The idea is that if
the demand for, say, Coors beer (or steel or autos) goes up, then
Golden (or Chicago or Detroit) will get bigger as more labor is hired to
produce more beer. The greater demand for labor in such growing places
will raise income and reduce unemployment, stimulating inmigration and
growth.
I "sort-of-invented"
(there are precursors, but the models were narrow or not well fleshed out)
a supply-side dynamic approach to regional growth that focuses on
amenity demands, one of which is climate. [The importance of a broad
range amenities, in an equilibrium setting, originated with the "access
to the center" work of Alonso and Muth, but was importantly expanded to
a broad range of amenities by George S. Tolley at the University of Chicago--I
owe an immense debt of gratitude to George for our many conversations about
urban economics, among other things!]. The idea is that generally
rising incomes in the U.S. give rise to increases in demands for normal
goods and decreases in demands for inferior goods. But, some of the
goods that we demand more of as we get richer (e.g. pleasant temperatures,
low humidity, scenic vistas and the like) can only be "bought" by moving.
This, in a nutshell, is the motivation for the on-going effect of amenities
on human migration.
An interesting implication
of the preceding argument is that one can rank the"Quality-of-Life"
of various locations according to how much people are willing to
"pay" to live in those places. That is, in moving to desirable locations,
people increase the supply of labor (lowering wages) and increase the demand
for housing (raising rents). They will stop moving (temporarily...until
nationwide income grows further) when the higher rents and lower wages
offset the value of the desirable amenities. In other words, we really
*do* pay for views of the Flatirons, sunshine, and all the other benefits
of living in Boulder! (And, note, somewhat surprisingly, that higher
rents in Boulder do not represent a higher "cost-of-living"; rather, they
represent the higher Benefits-of-living, benefits that, unfortunately,
we just have to pay for!)
A further implication
of the preceding (as a couple of the articles below discuss) is that retirees
can become better off by moving to locations where amenities are largly
"priced" in wages, rather than in rents. Indeed, twenty percent of
the variation in where those over 65 move can be explained by the share
of amenity value going into labor versus land markets.
I have simplified the
discussion here a bit (ignoring, for example, producer amenities such as
harbors, access to various inputs, etc.), but this should give you a sense
of the content of the following research efforts:
BOOKS:
1. Urban Growth Policy in a Market Economy. New York: Academic Press, 1979, 220 pp. (with G.S. Tolley and J.L. Gardner).
ARTICLES:
1. "A Reexamination of Migration, Economic Opportunity, and the Quality of Life." Journal of Regional Science, Vol. 16, No. 1 (March 1976), pp. 107-112.
2. "A Life-Cycle Empirical Analysis of Migration and Climate, by Race." Journal of Urban Economics, Vol. 6, No. 2 (April 1979), pp. 135-147.
3. "The Urban Growth Question." Law and Contemporary Problems, Vol. 43, No. 2 (Spring, 1979), pp. 211-238 (with G.S. Tolley and J.L. Gardner).
4. "Household Migration: Theoretical and Empirical Results." Journal of Urban Economics, Vol. 6, No. 3 (July 1979), pp. 383-404 (with P. Linneman).
5. "Over-Urbanization and Its Relation to Economic Growth for Less Developed Countries." Economic Forum, Vol. X, No. 1 (Summer, 1979), pp. 95-100 (with R.L. Sexton). Reprinted in Urban Development in the Third World, Pradip K. Ghosh (Ed), Westport, Conn: Greenwood Press, 1984, pp. 160-166.
6. "Income and Migration Reconsidered." Journal of Human Resources, Vol. XIV, No. 1 (Winter, 1979), pp. 112-119.
7. "Migration and Climate." Journal of Regional Science, Vol. 20, No. 2 (May 1980), pp. 227-237.
8. "Migration and Job Change: A Multinomial Logit Approach." Journal of Urban Economics, Vol. 14, No. 3 (November, 1983), pp. 263-279 (with P. Linneman).
9. "Migration with a Composite Amenity: The Role of Rents." Journal of Regional Science, Vol. 23, No. 4 (November, 1983), pp. 541-546.
10. "A Multi-Disciplinary Interpretation of Migration: Amenity Capitalization in Both Land and Labor Markets." The Annals of Regional Science, Vol. 18, No. 2 (July 1984), pp. 35-44 (with R.L. Sexton and T.A. Knapp).
11. "A Theory of International Migration Flows: U.S. Immigration from Mexico." Review of Regional Studies, Vol. 14, No. 1 (Winter 1984) pp. 1-7 (with T.A. Knapp).
12. "Hedonic Analysis in a Spatial Context: Theoretical Problems in Valuing Location-Specific Amenities." Economic Record, Vol. 61, No. 175 (December 1985), pp. 737-743 (with T.A. Knapp).
13. "Mobility Behavior of the Elderly." Journal of Urban Economics, Vol. 23, No. 1 (March 1988), pp. 1-8 (with T.A. Knapp).
14. "On the Role of Amenities in Models of Migration and Regional Development." Journal of Regional Science, Vol. 29, no. 1 (February 1989), pp. 71-87 (with T.A. Knapp).
15. "Multimarket Amenity Compensation and the Behavior of the Elderly," American Economic Review, Vol. 81, No. 5 (December 1991) pp. 1374-1381 (with D. Waldman).
16. "The Role of Equilibrium and Disequilibrium in Modeling Regional Growth and Decline: A Critical Reassessment," Journal of Regional Science, Vol. 33, no. 1 (February 1993), pp. 69-84 (with Peter Mueser).
17. "Examining the Role of Economic Opportunity and Amenities in Explaining Population Redistribution," Journal of Urban Economics, Vol. 37, No. 1 (February 1995) pp. 1-25 (with P. Mueser).
18. "Amenities and Fringe Benefits: Omitted Variable Bias," The American Journal of Economics and Sociology, Vol. 58, no. 3, pp. 399-404 (with R. Sexton, M. Arthur)
19. "Amenities and the Labor Earnings Function," The Journal of Labor Research, Vol. XX, no. 3 (Summer 1999), pp. 368-376 (with R. Sexton, M. Arthur)
20. "Non-Optimal Levels of Suburbanization," Environment and Planning A, Vol. 35, No. 2 (February, 2003), pp. 191-198.
21. "The Economics of Ghost Towns," (with Stephan Weiler, manuscript)
BOOK CONTRIBUTIONS:
21. "Overall Assessment of Market Performance." Chapter 13 in Urban Growth Policy in a Market Economy. New York: Academic Press, 1979 (with G. S. Tolley and J.L. Gardner), pp. 197-209.
22. "Policy Conclusions." Chapter 14 in Urban Growth Policy in a Market Economy. New York: Academic Press, 1979 (with G.S. Tolley), pp. 211-216.
23. "Rural to Urban Migration: Population Distribution Patterns." In A Survey of Agricultural Economics Literature, Volume III: Economics of Welfare, Rural Development and Natural Resources in Agriculture, 1940s to 1970s, Lee R. Martin (ed.). University of Minnesota Press, 1981, for the American Agricultural Economics Association (with M. Clawson), pp. 362-390.
24. "Amenities and Migration Over the Life-Cycle." Chapter 10 of The Economics of Urban Amenities, D.B. Diamond and G.S. Tolley (eds.). New York: Academic Press, 1982 (with J. Regulska), pp. 210-221.
25. "Employment and Resident Location Change." Chapter 2 of Housing and Migration. R.J. Krumm (ed.) Mt. Pleasant, MI: Blackstone Books, 1988 (with P. Linneman).
26. "An Historical Perspective on Inter-regional Migration in the United States." Chapter 7 of Housing and Migration, R.J. Krumm (ed.) Mt. Pleasant, MI: Blackstone Books, 1988 (with R. Vedder and L. Galloway).
27. "Regional Location Patterns in the United States: Recent Changes and Future Prospects." In Migration and Labor Market Adjustment, J. Van Dijk, H. Folmer, H.W. Herzog, Jr. and A.M. Schlottman (eds). Norwell, MA: Kluwer Academic Publishers (with M.J. Greenwood and J.A. Chalmers), 1989.
28. "Design of Incentives for Spatial Intervention for Developing Countries."
In
Proceedings of the Conference on Urbanization and Developing Countries,
Brazil, August 1980 (with G.S. Tolley and R.J. Krumm).