The Role of Amenities in a General Equilibrium Model of Regional Migration and Growth

Abstract

Economists have been steadily refining the theoretical framework developed by Sherwin Rosen [25] to determine the implicit prices of amenities. Rosen's model was a partial equilibrium model which focused on the behavior of households as consumers. Jennifer Roback [23; 24] substantially expanded Rosen's model by explicitly including the behavior of firms in a more general framework which she used to measure the value of amenities. Blomquist, Berger, and Hoehn [3] extended the Roback model by incorporating intraregional as well as interregional differences in amenities. However, their basic theoretical framework is the same as that proposed by Roback. Other works in this literature which have been based on Roback's model are primarily empirical in nature, for example, see Beeson and Eberts [2]. In a recent paper, Voith [31] modifies Roback's model by incorporating local as well as regional amenities and by recognizing that the effect of an amenity on wages and rents may differ depending upon the nature 6f the community, i.e., whether the community is residential, commercial, or mixed use. Voith also presents empirical results with mixed success.