A note on opportunity costs and migration analysis

The hypothesis that opportunity costs associated with foregone alternatives in moving from region i to region j significantly affect the migration decision has been proposed by Levy and Wadycki in the context of a regression model of migration. Their results for Venezuela were highly successful and additional evidence reported by Wadycki with United States data for 1955–60 also substantiated the basic hypothesis.These previous attempts at including the concept of intervening opportunities into the regression model of migration employed definitions similar to Stouffer's seminal 1940 article on the subject of intervening opportunities. The present paper presents two alternative formulations for intervening opportunities and tests them with 1955–60 United States interstate migration data. In all cases we find that both the explanatory power of distance and its estimated elasticity fall substantially when we include the proxy variables for intervening opportunities. Furthermore, including these proxies increases the explanatory power of the migration model substantially. Proxy variables which employ Stouffer's 1960 reformulation of the concept of intervening opportunities prove superior in our empirical tests.