Estimating Interregional Utility Differentials

Abstract

The examination of long-term Japanese data on interregional migration revealed three stylized facts of migration behavior. Based on the facts, we formulated an operational model and estimated interregional utility differentials. We found that the interregional utility differentials have been converging until the late 1970s. We showed that the utility estimates are highly correlated with per capita real income. We also applied the model to interregional migration in the United States and Canada as well as the interindustry movement in Japan and confirmed the model's validity.