Understanding Migration Aversion Using Elicited Counterfactual Choice Probabilities

Abstract

Residential mobility rates in the U.S. have fallen considerably over the past three decades. The cause of the long-term decline remains largely unexplained. In this paper we investigate the relative importance of alternative drivers of residential mobility, including job opportunities, neighborhood and housing amenities, social networks and housing and moving costs, using data from two waves of the NY Fed's Survey of Consumer Expectations. Our hypothetical choice methodology elicits choice probabilities from which we recover the distribution of preferences for location and mobility attributes without concerns about omitted variables and selection biases that hamper analyses based on observed mobility choices alone. We estimate substantial heterogeneity in the willingness-to-pay (WTP) for location and housing amenities across different demographic groups, with income considerations, proximity to friends and family, neighbors' shared norms and social values, and monetary and psychological costs of moving being key drivers of migration and residential location choices. The estimates point to potentially important amplifying roles played by family, friends, and shared norms and values in the decline of residential mobility rates.

The effect of homeownership on the option value of regional migration

“…In the model, this selection mechanism, together with any other factor that implies a high unobservable location preference, is collapsed into a type of person that has prohibitively high moving costs ( is large), and thus is unlikely to move. Providing some real‐world context for this setup, Koşar, Ransom, and Van der Klaauw () used consumer expectations data to find that for close to of the population, nonpecuniary moving costs approach infinity.…”

Are preferences for city attributes heterogeneous? An assessment using a discrete choice experiment

“…Even though choice experiments avoid endogeneity issues that would emerge from the analysis of revealed relocation choices, there is the limitation stemming from respondents making decisions in hypothetical city choice scenarios. Another limitation is highlighted by Kosar et al (2020) who use a similar approach, but focus more on moving costs. We were not aware of this study when designing the experiment.…”

“…In fact, our study also provides a deeper look into the heterogeneity in individual preferences for city amenities. A study that does something similar in the case of the United States is that of Kosar, Ransom, and der Klaauw (2020). The authors find evidence of high heterogeneity in WTP metrics for location characteristics, both across and within demographic groups.…”

Migration Constraints and Disparate Responses to Changing Job Opportunities

“…3 R. Wilson (2018) demonstrates that access to information can be important for informing migration decisions. Cooke (2011) attributes 20 percent of the overall decline in migration rates between 1999 and 2009 to what he calls "secular rootedness," suggesting a social cost to migration (also see Koşar, Ransom, and Wilbert van der Klaauw 2019). Spilimbergo and Ubeda (2004) also establish family ties as a factor affecting migration in their study for differences in migration rates between Whites and Blacks in the U.S.…”