THE EFFECT OF ECONOMIC FREEDOM ON MIGRATION FLOWS BETWEEN U.S. STATES: IS ECONOMIC FREEDOM A DETERMINANT OF FLOW DIFFERENTIALS?

Utilizing data from the U.S. Census survey (2000) and the North American Economic Freedom Index (Karebegovic, McMahon, and Samida, 2004), this study evaluates the outcome of economic freedom on gross migration flows within the United States. The estimation process is to use a gravity model. Since longitudinal data is not available, regressions are run on a cross section of data drawn from the survey of 2000. In addition to ordinary least squares estimates, various models of spatial dependency are employed to improve estimation of coefficients and hypothesis results. It is determined that greater economic freedom positively impacts migration between states. Further, it is discovered that a general autoregressive spatial model (GSAR) performs the best out of the selected models and augments the impact of economic freedom on migration.