Scandinavian Working Papers in Economics

Working Papers,
Copenhagen Business School, Department of Economics

No 14-2021: Transportation and Quality of Life: Evidence from Denmark

Jesper Hybel () and Ismir Mulalic ()
Additional contact information
Jesper Hybel: Aalborg University, Department of the Built Environment, Postal: Thomas Manns Vej 23, 9220 Aalborg Øst, Denmark
Ismir Mulalic: Department of Economics, Copenhagen Business School, Postal: Copenhagen Business School, Department of Economics, Porcelaenshaven 16 A. 1. floor, DK-2000 Frederiksberg, Denmark

Abstract: This paper investigates the importance of transportation for quality of life in Denmark. We first calibrate a simple general equilibrium model to analyse how local wage levels, housing costs, and commuting costs vary across urban areas as well as to construct a quality of life index that measures a representative household's willingness to pay for local amenities. We find that the quality of life is high in large cities. Wages and rents are also substantially higher in the urban areas that are dense. We then regress the quality of life index on observed amenities to infer how much quality of life is associated with transportation. Our empirical results suggest that the quality of the public transport system is particularly important for the quality of life.

Keywords: Quality of life; Rent gradients; Wage gradients; Commuting costs; Amenities; Transportation

JEL-codes: H40; J30; O52; R10; R40

44 pages, September 20, 2021

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