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Abstract

"The Influence of Psychic Costs on Human Resource Allocation'' Eastern Kentucky migrants in two urban centers were studied to determine the income levels required to induce a return to their home region. The average income specified was $1,777 below 1971 earned family income, and close to the 1971 average earnings in Eastern Kentucky. Roughly 50 percent of the variation in the income differential (psychic costs) was explained by regression analysis. Variations in the income differentials suggest that rural-to-urban migration is associated with negative private externalities at the point of origin and that interregional factor price differentials are inadequate measures of relative welfare.

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