Abstract
The linked nature of long-term patterns of urban deconcentration and regional change (from rustbelt to sunbelt in the U.S., but with similar phenomena increasingly world-wide) is analyzed in a framework that emphasizes heterogeneous human preferences. The focus is on the important interactions that exist between local and regional amenities, whether exogenous or endogenous. The central thesis is that persistent exogenous amenity variation among regions provides an underlying pattern of regional growth and decline. However, inappropriate provision of local public goods in central cities is seen to lead both to non-optimally large levels of suburbanization and to rates of regional change that are also non-optimally large.
Highlights
Economists’ key insight into human behavior is that observed choices stem from the interaction between preferences and opportunities
Inappropriate provision of local public goods in central cities is seen to lead both to non-optimally large levels of suburbanization and to rates of regional change that are non-optimally large
With individuals and firms forming rational expectations about future opportunities, the level of migration is seen as a function of variations in factors influencing migrant labor demand (“economic opportunity”) and migrant labor supply (“residential amenities”)
Summary
Economists’ key insight into human behavior is that observed choices stem from the interaction between preferences and opportunities. It is certainly the case that transportation advances have facilitated regional and urban change, while housing durability hinders such change These observations, while certainly both interesting and important, do not highlight the complex human preferences over spatially varying characteristics that are the root causes of observed urban and regional population patterns and trends. With individuals and firms forming rational expectations about future opportunities, the level of migration is seen as a function of variations in factors influencing migrant labor demand (“economic opportunity”) and migrant labor supply (“residential amenities”) They found that “systematic migration trends observed over several decades appear to have been tied to household preferences for amenities, in conjunction with changes in income or technology that increase the importance of such factors” Small—but systematic—impacts of amenities on residential location choice cumulate over time, while the employment-related factors (e.g. spatial impacts of oil price shocks, pollution controls, or recessions) appear to exhibit modest intertemporal correlation
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