%0 Report
        %A Ahlfeldt, Gabriel M.
%A Bald, Fabian
%A Roth, Duncan H.W.
%A Seidel, Tobias
        %T Measuring Quality of Life Under Spatial Frictions
        %D 2024
        %8 2024 Dec
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 17549
        %U https://www.iza.org/index.php/publications/dp17549
        %X 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.
        %K housing
%K spatial frictions
%K rents
%K prices
%K productivity
%K quality of life
%K spatial equilibrium
%K wages