Retire to Where? A Discrete Choice Model of Residential Location

Many studies of migration attempt to identify attributes of places that influence residential location decisions. Most such studies relate an area's migration rates to its own attributes, or the flow of migrants bewteen two areas to both areas' attributes. We focus on retirement migration, and extend the literature by using a discrete choice framework in which a person's location decision depends on the attributes of all potential locational choices. This leads to a multinomial logit specification in which individuals face over 3000 county-level choices, which we apply to Census data on the location of as many as 8.9 million persons age 65-74. In order to make the estimation problem manageable, we employ a sampling-of-alternatives result due to McFadden, and use aggregated migratory-flow data for which existing estimation software is applicable. Our results indicate that in general, persons around retirement age avoid high taxes and housing prices, while they are drawn to areas with relatively high spending on such services as fire, police, and recreation. Amenities such as coastline and warm weather are also valued.