Where we’d like to live vs where we have to live

I recently had a conversation with a friend who’d lived in Wollongong for a long time before spend a while overseas. Upon returning to Australia, she was unable to return to the work she had been doing in Wollongong and consequently moved to Sydney. I’ve previously wondered to what degree people live in large cities like Sydney out of an innate desire to live in such places and how many live there due to the need to find work, and the aforementioned conversation inspired me to wonder if there might be any research into the topic.

I couldn’t find any relevant survey results for Australia, and the only academic research I could find refers to what kind of amenities “knowledge workers”, mostly in Europe, like to have in their neighbourhoods. Amongst the studies I could access without cost, Amnon Frenkel and colleagues say that “municipal socioeconomic level, housing affordability and commuting time” are the most important considerations, while Pascal Beckers and Sanne Boschman say that “[highly skilled] foreign workers select high income neighbourhoods with a large supply of catering facilities and good accessibility to both jobs and international schools”. Nothing about whether they preferred larger or smaller cities, or what other kinds of workers might prefer.

Both of these studies refer to what economists call revealed preferences, meaning that they are what people actually chose to do in the face of the options actually available to them, not what they might like to independently of financial constraints, etc. By this measure, my friend wants to live in Sydney, as do five million other people, while only 250,000 want to live in Wollongong. We don’t know what these people think about the lifestyle of Sydney vs the lifestyle of Wollongong independently of financial constraints.

Of course people really do have financial and other constraints, and revealed preferences are useful insofar as they represent what people actually do given all of the constraints they face. But the preference revealed in choosing where to live reflects not just the preferences of the individuals in Sydney or Wollongong now, but also historical decisions that made Sydney and Wollongong what they are in the first place. Without the need to work, how many Wollongongers would move Sydney, and how many Sydneysiders to Wollongong? If Australia were re-settled from scratch, would the settlers re-build Sydney or would they distribute themselves more widely?

In one sense these are meaningless and unanswerable questions, since most people do need jobs and re-building the country from scratch would be absurdly expensive. But Australia, as a collective, does have some control over how it distributes jobs and builds cities in the future. If people express a preference for living in detached housing, for example, but end up living in apartments due to the price of land in heavily-populated cities, there are in principle things that might be done to shape cities in the former direction—but no one will ever do them if we take people living in apartments to mean that they like living in apartments.

Regarding the question that inspired this post, though, I’m not really much more enlightened about people’s preferences for urban vs. regional living than I was before. Both my friend and I prefer regional living, as do other friends I have living around Wollongong and the South Coast, but I also have plenty of friends who appear to be happy living in Sydney or Brisbane (or even Singapore). For now I guess we’ll just get on with living where we can.

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