Rural Decline and Residential Sorting

Across nations, rural populations are declining. Based on a structural dynamic model and a population-wide panel of annual data on Danish households and owner homes 1992-2022, this paper provides the first nationwide estimates of the importance of amenities and local public service for residential sorting, with special emphasis on rural areas. The paper provides estimates of the willingness-to-pay for local services and the implied costs of closing a local rural school or increasing the travel time to nearest emergency unit.