Promoting migration for the formation of compact cities: A behavioral economics approach

Compacting mature cities is necessary to maintain a sustainable urban structure. This trend is also being considered as a countermeasure for shrinking cities and is being addressed in various regions of developed countries. However, optimizing city size in response to a declining population is unprecedented and requires further examination. A key challenge in this context is encouraging existing residents in areas where shrinkage is desired to relocate to the city center. Given their right to reside in the area, it is necessary to encourage voluntary relocation rather than forced exclusion. Therefore, this study explores the possibility of migration promotion measures that incorporate a behavioral economics perspective. Psychological trends, including Prospect Theory and Sunk Cost thinking, were identified. In addition, the younger generation and those approaching retirement were found to be desirable for promoting resettlement. The findings of this study can guide municipalities in pursuing compact city policies for the redevelopment of city centers and promoting migration. From an academic perspective, this study demonstrates that behavioral economics can be applied to residents living on the fringe of conurbations in a society with a declining population.