Residential Land Use and Utilities of Multiple Generations with Lifespan Perspectives and Demographic Dynamics

Kono, Tatsuhito and Tsutaki, Keisuke (2023): Residential Land Use and Utilities of Multiple Generations with Lifespan Perspectives and Demographic Dynamics.

Abstract

Demographic dynamics and spatial distribution of urban amenities bring about spatially different benefits to young, middle-aged, and elderly people, thereby affecting residential location patterns. Using an overlapping generations model in a closed city with two zones with different amenity levels, we demonstrate how young, middle-aged, and elderly generations with lifespan perspectives reside in the two zones with their interplay across periods and locations and analyze the residents’ welfare levels. We find that, unlike a static situation, there is no steady residential pattern in which middle-aged or elderly households live in both of the two zones when they optimize their residential locations throughout their life. Our numerical simulation reveals two findings useful for policy making: first, urban amenities should be unevenly distributed across the city from a perspective of lifetime utility; second, different demographic changes lead to different desirable residential patterns in terms of utility. Finally, we check the robustness of these findings for the case of the expansion of remote work.

• Item Type: MPRA Paper
• Language: English
• Keywords: Urban land use, Overlapping generations model, Urban amenities, Demographic dynamics
• Subjects: H - Public Economics > H4 - Publicly Provided Goods; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R0 - General; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R2 - Household Analysis > R28 - Government Policy

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