ABSTRACT
The U.S. economy underwent a number of structural transformations during the latter part of the twentieth century which affected the pattern of regional growth and development. The decline of small family farms released surplus labor into the rest of the economy. Maturation of its product cycle made manufacturing less dependent on the density of local economic activity and more footloose. There were significant advances in communications and transportation technology, and the rise of high-end services. Globalization of commerce likewise made production less dependent on local markets while also putting competitive pressures on domestic industries. These developments made the ability to attract productive labor a prominent regional development concern. As found in writings as far back as those by Ernst Georg Ravenstein, e.g., “Laws of Migration” (Ravenstein, 1885, 1889), economic motives have been routinely argued to be the dominant force underlying the geographic migration of labor. Yet, economic models of human migration increasingly failed to accurately predict observed U.S. migration flows in the post-World War II period. This failure primarily resulted from ignoring the increasing role of environmental or natural amenities in the household migration decision. Environmental amenities, which can be defined as “valued natural attributes of a place, including terrestrial and aquatic landscapes, distinguishing topographical features, climate, air, water and biodiversity quality and quantity” (Moss, 2006, p. 8), provide non-pecuniary utility to area residents. According to compensating differential theory though, with roots dating back to Adam Smith’s Wealth of Nations (Smith, 1776), environmental amenities should be fully capitalized into local wages and prices, equalizing household utility across areas. To the extent they are constant over time, one might then expect area environmental amenities to be incapable of producing continual inflows of migrants and regional growth. But as persuasively advanced by Graves (1979, 1980, 1983), rising U.S. income and wealth increase the demand for environmental amenities as a normal good. This creates tourist and recreational economic activity and induces in-migration flows to regions possessing high levels of environmental amenities. Likewise, advances in air conditioning and heating technology changed the relative price between consumption goods and climate (Haurin, 1980), further spurring amenity-related migration.
