Monday, December 28, 2015

High and low

Bloomberg published an interesting article about American domestic migration patterns in recent years.  One of the findings is that Americans are moving from high-productivity states like New York and California to lower-productivity states like North Carolina.  One pair of researchers found that this diminution in productivity had held back GDP growth by 13.5% over some period of time.

One of the constraints is the lack of affordable housing in the big hitter states, and I can attest that this is true for sure, and indeed we can see that it's replicated in smaller markets like NC's Triangle. Chapel Hill is unaffordable for most middle-income people.

But is this all bad? If middle-income people move from high-productivity and high-cost of living places to low-productivity ones where their housing dollar goes further, aren't they in some sense getting higher productivity for themselves as each hour worked buys more house and more yard, so that in fact they are getting more? I'm thinking of something like the spatial equivalent of a hedonic index, which Republicans like to advocate (and not without some logic) into slowing the rise in cost of living adjustments to Social Security and the like.

Yes, when people move from NY/NJ to some parts of NC and the like, they may move from places where the "cultural density" goes down, there's less art and cultural diversity. For a time. But the newcomers bring new desires and new values, and the newly populated places can catch up quickly, aided by that great leveller, the interweb.

In any case, I dunno, just speculating. I just downloaded a short book referenced by the article, "The Gated City" by Ryan Avent of the Economist. Hopefully he will think some of this stuff through, and in a way that is not a total rehash of something I've already read in the magazine.

Back to work!

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