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Quality of life in a dynamic spatial model

Author

Listed:
  • Gabriel M. Ahlfeldt
  • Fabian Bald
  • Duncan Roth
  • Tobias Seidel
Abstract
We develop a dynamic spatial model in which heterogeneous workers are imperfectly mobile and forward-looking and yet all structural fundamentals can be inverted without assuming that the economy is in a stationary spatial equilibrium. Exploiting this novel feature of the model, we show that the canonical spatial equilibrium framework understates spatial quality of-life differentials, the urban quality-of-life premium and the value of local non-marketed goods. Unlike the canonical spatial equilibrium framework, the model quantitatively accounts for local welfare effects that motivate many place-based policies seeking to improve quality of life.

Suggested Citation

  • Gabriel M. Ahlfeldt & Fabian Bald & Duncan Roth & Tobias Seidel, 2020. "Quality of life in a dynamic spatial model," CEP Discussion Papers dp1736, Centre for Economic Performance, LSE.
    • Handle: RePEc:cep:cepdps:dp1736
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Kahn, Matthew E. & Tracy, Joseph, 2024. "Monopsony in spatial equilibrium," Regional Science and Urban Economics, Elsevier, vol. 104(C).
    2. Ahlfeldt, Gabriel & Bald, Fabrian & Roth, Duncan & Seidel, Tobias, 2020. "Quality of life in a dynamic spatial model," CEPR Discussion Papers 15594, C.E.P.R. Discussion Papers.
    3. Südekum, Jens, 2021. "Place-based policies - How to do them and why," DICE Discussion Papers 367, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    4. Fabian Bald, Marcel Henkel, 2021. "The Role of Local Public Goods for Gender Gaps in the Spatial Economy," Diskussionsschriften credresearchpaper33, Universitaet Bern, Departement Volkswirtschaft - CRED.
    5. van Vuuren, Aico, 2022. "Is there a diminishing value of urban amenities as a result of the Covid-19 pandemic?," Working Papers in Economics 818, University of Gothenburg, Department of Economics.
    6. Ahlfeldt, Gabriel M. & Heblich, Stephan & Seidel, Tobias, 2023. "Micro-geographic property price and rent indices," Regional Science and Urban Economics, Elsevier, vol. 98(C).
    7. Althoff, Lukas & Eckert, Fabian & Ganapati, Sharat & Walsh, Conor, 2022. "The Geography of Remote Work," Regional Science and Urban Economics, Elsevier, vol. 93(C).
    8. Anna-Theresa Renner & Dieter Pennerstorfer, 2020. "Modeling inter-regional patient mobility: Does distance go far enough?," Economics working papers 2020-04, Department of Economics, Johannes Kepler University Linz, Austria.
    9. van Vuuren, Aico, 2023. "Is there a diminishing willingness to pay for consumption amenities as a result of the Covid-19 pandemic?," Regional Science and Urban Economics, Elsevier, vol. 98(C).
    10. Michael Irlacher & Dieter Pennerstorfer & Anna‐Theresa Renner & Florian Unger, 2023. "Modeling Interregional Patient Mobility: Theory And Evidence From Spatially Explicit Data," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 64(4), pages 1493-1532, November.
    11. Ferrara, Antonella Rita & Dijkstra, Lewis & McCann, Philip & Nisticó, Rosanna, 2022. "The response of regional well-being to place-based policy interventions," Regional Science and Urban Economics, Elsevier, vol. 97(C).
    12. Aldeco Leo Lorenzo Rodrigo & Jurado Jose A. & Ramírez-Álvarez Aurora A., 2022. "Internal Migration and Drug Violence in Mexico," Working Papers 2022-11, Banco de México.
    13. Fischer, Thomas, 2023. "Spatial inequality and housing in China," Journal of Urban Economics, Elsevier, vol. 134(C).

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    More about this item

    Keywords

    Covid-19; dynamic; housing; migration; rents; pollution; productivity; spatial equilibrium; quality of life; wages; welfare; economic geography; productivity; wages; wellbeing;
    All these keywords.

    JEL classification:

    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location
    • R5 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis

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