Measuring Quality of Life under Spatial Frictions

Gabriel Ahlfeldt, Fabian Bald, Duncan Roth and Tobias Seidel

No 19769, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Using a quantitative spatial model as a data-generating process, we explore how spatial frictions affect the measurement of quality of life. We find that under a canonical parameterization, mobility frictions---generated by idiosyncratic tastes and local ties---dominate trade frictions---generated by trade costs and non-tradable services---as a source of measurement error in the Rosen-Roback framework. This non-classical measurement error leads to a downward bias in estimates of the urban quality-of-life premium. Our application to Germany reveals that accounting for spatial frictions results in larger quality-of-life differences, different quality-of-life rankings, and an urban quality-of-life premium that exceeds the urban wage premium.

Keywords: Housing (search for similar items in EconPapers)
JEL-codes: J3 R2 R3 R5 (search for similar items in EconPapers)
Date: 2024-12
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Related works:
Working Paper: Measuring Quality of Life under Spatial Frictions (2025)
Working Paper: Measuring quality of life under spatial frictions (2024)
Working Paper: Measuring Quality of Life Under Spatial Frictions (2024)
Working Paper: Measuring quality of life under spatial frictions (2024)
Working Paper: Measuring Quality of Life Under Spatial Frictions (2024)
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