Gautier, Pieter A. Svarer, Michael Teulings, Coen N.
Year of Publication:
Tinbergen Institute Discussion Paper 05-015/3
Do people move to cities because of marriage market considerations? In citiessingles can meet more potential partners than in rural areas. Singles are thereforeprepared to pay a premium in terms of higher housing prices. Once married, themarriage market benefits disappear while the housing premium remains. We extendthe model of Burdett and Coles (1997) with a distinction between efficient (cities)and less efficient (non-cities) search markets. One implication of the model is thatsingles are more likely to move from rural areas to cities while married couples aremore likely to make the reverse movement. A second prediction of the model is thatattractive singles benefit most from a dense market (i.e. from being choosy). Thosepredictions are tested with a unique Danish dataset.