Academic journal article Journal of Regional Analysis & Policy

Net Migration Determinants

Academic journal article Journal of Regional Analysis & Policy

Net Migration Determinants

Article excerpt

(ProQuest: ... denotes formulae omitted.)

1. Introduction

This empirical study investigates net state inmigration rate determinants for the period 20002003, a period that approximates the 2000-2004 interval studied by Cebula and Alexander (2006) in a previous issue of this journal. This study approximately parallels the model and study period considered therein, although it adopts a number of somewhat different variables. Naturally, this study considers the impact of not only economic factors, but also of quality-of-life factors, certain state and local government education outlays and property tax levels, and the presence of state individual income taxation. Not surprisingly, the results are largely consistent with the Cebula and Alexander (2006) findings.

Our focus on the Cebula and Alexander (2006) study is based in part upon observations regarding that study by Cushing (2006). In particular, Cushing (2006, p. 115) observed that although Cebula and Alexander (2006) "...use a fairly conventional model, [they] incorporate some unconventional factors...hazardous waste sites, and toxic chemical releases..." being among them. In addition, Cushing (2006) observed that Cebula and Alexander (2006) were among the first to look at migration during the first part of the 21st century.

2. The in-migration context

Numerous studies have empirically addressed determinants of migration. Most of these studies emphasize the migration impact not only of economic factors but also of non-economic, i.e., socalled "quality-of-life" factors (Cebula, 1979B,1993; Cebula and Belton, 1994; Cebula and Payne, 2005; Clark and Hunter, 1992; Conway and Houtenville, 1998, 2001; Gale and Heath, 2000; Gallaway and Cebula, 1973; Gunderson and Sorenson, 2010; Hinze, 1977; Milligan, 2000; Renas, 1978, 1980, 1983; Saltz, 1998; Vedder, 1976; Vedder and Cooper, 1974). As demonstrated in Gallaway and Cebula (1973), Renas (1978, 1983), and more recent studies as well, omission of non-economic factors from an empirical migration analysis constitutes an omitted-variable problem that generally compromises the integrity of that analysis.

This study parallels the migration-investment models developed in Sjaastad (1962), Riew (1973), Cebula (1979B, Chapter 4), and, of course, Cebula and Alexander (2006). The consumer-voter is treated as regarding the migration decision as an investment decision, such that the decision to migrate from area i to area j requires that his/her expected net discounted present value of migration from area i to area j, DPVij, be (a) positive; and (b) the maximum net discounted present value that can be expected from moving from area i to any other known and plausible alternative area/location.

Following in principle the models in Sjaastad (1962), Riew (1973), and Cebula (1979B, Chapter 4), DPVij consists of three major sets of considerations:

1. expected income (I) and cost of living (COL);

2. quality-of-life (QOL) characteristics; and

3. per capita state plus local public education outlays (ED), per capita property tax levels (PT), and the presence of state income taxation ( SIT) (Cebula, 1979A).

Based on Sjaastad (1962), Riew (1973), and Cebula (1979B, Chapter 4), it further follows that migration will flow from area i to area j only if:

... (1)

Alternatively stated, the decision to migrate from state i to state j implies that for at least some persons, DPVij > 0 and that their DPV is maximized in state j. On the other hand, the decision for consumer-voter residents to remain in state i presumably implies that all DPVij are not positive.

It logically follows that for state j:

... (2)

where MIGj is in-migration to state j. In linear terms, equation (2) becomes:

... (3)

Following the conventional wisdom in a general sense, it is hypothesized in the present study that:

... (4)

The first two signs reflect migrant preferences for areas offering better expected economic benefits, ceteris paribus. …

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