The capitalization of non-market attributes into regional housing rents and wages: Evidence on German functional labor market areas

Norbert Hiller and Oliver Lerbs

No 71, CAWM Discussion Papers from University of Münster, Münster Center for Economic Policy (MEP)

Abstract: This paper extends existing research on regional quality of life in Germany by newly estimating the role of region-specific (dis-)amenities in the determination of regional housing rents and wages. Different from previous studies, the empirical analysis draws on functional labor market areas recently delineated by Kosfeld and Werner [Raumf Raumordn (2012) 70: 49-64] rather than administrative jurisdictions, circumventing problems of spatial autocorrelation. Consistent with cross-region spatial equilibrium, the results indicate that labor market area heterogeneity in housing rents and wages is closely related to differences in non-market attributes that affect household utility. The results enable the construction of a comprehensive ranking of regional quality of life which can be directly compared to the findings of previous studies.

Keywords: Functional labor market areas; Non-market (dis-)amenities; Spatial equilibrium analysis; Quality of Life; Spatial autocorrelation (search for similar items in EconPapers)
JEL-codes: R13 R21 R23 (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-eur, nep-geo and nep-ure
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Journal Article: The capitalization of non-market attributes into regional housing rents and wages: evidence on German functional labor market areas (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:cawmdp:71

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