POLITICAL ECONOMY

WORKING PAPERS


A simple theory of permanent migrations: The case of
Gypsies

Joo Ricardo Faria

Political Economy Working Paper 04/04
FEBRUARY 2004





SCHOOL OF SOCIAL SCIENCES

THE UNIVERSITY OF TEXAS AT DALLAS

RICHARDSON, TEXAS 75083-0688


AN EQUAL OPPORTUNITY/ AFFIRMATIVE ACTION UNIVERSITY


2

A simple theory of permanent migrations: The case of Gypsies



Joo Ricardo Faria
School of Social Sciences, University of Texas at Dallas

Abstract: One of the main characteristics of the Gypsies is their continual mobility. The
permanent migration behavior becomes a habit. This paper provides a simple dynamic
model to explain permanent migrations, such as the Gypsies, by the formation of
migration habits. The model derives the optimal levels of Gypsies consumption,
migration, migration habits and income, as a function of the importance of habits, the
relative importance of recent migrations on habit formation, Gypsies time preference,
and the marginal impacts of actual consumption and migration on consumption variation.

Keywords : Migration; Minorities; Intertemporal choice.
JEL Classification Numbers : J15, J61, D99
Acknowledgements: I would like to thank, without implicating, Miguel Leon-Ledesma
for useful comments.
Address for Correspondence: J.R. Faria, School of Social Sciences, University of Texas
at Dallas, P.O. Box 830688, GR 31, Richardson, TX 75083-0688, USA. Phone: 972-883
6402, Fax: 972-883 6297. E-mail: jocka@utdallas.edu

3
A simple theory of permanent migrations: The case of Gypsies

I shall here content myself with observing that from whatever country
they come, whether from India or Egypt, there can be no doubt that they
are human beings and have immortal souls George Borrow, The Zincali -
An Account of the Gypsies of Spain.


1. Introduction
In economics migration is usually understood as a result of a differential of
economic opportunities between two different regions. People migrate whenever the
economic opportunities are better abroad than at home. Basically economists focus on
income differentials as the main engine of migration [e.g., Todaro, 1969]. In a world
without barriers of labor mobility this mechanism would lead to an equalization of
income everywhere and migration would end as soon as the income differentials
disappear. According to this view, rational economic agents calculate, taking into account
all relevant constraints such as costs of assimilation and risk differentials [e.g., Chiswick,
1978; Stark and Levhari, 1982; Levy and Tsur, 2002], and decide to migrate whenever
total benefits are greater than total costs. Therefore the decision to migrate is endogenous.
The economic mechanism, however, fails to explain particular episodes of
migration, such as the Stalinist transposition of peoples in the Soviet Union before the
WWII [Faria and Mollick, 1996] or more recently the expulsion of Asians from Uganda
by Idi Amin dictatorship
1
. These are examples of forced migration, which were triggered
by exogenous forces that pushed some populations out of their homes. The main force
behind their migration lies on government political motivations and decisions. Therefore

1
In 1972 President Idi Amin gave the 80,000-strong Asian communit y [65% Hindu] of Uganda ninety days
in which to leave the country, after which their businesses and homes would be handed over to native
Ugandans.
4
the migration decision is exogenous to these populations. That is, the individual decision
to migrate motivated by economic reasons have played a very small role in these cases
2
.
Another interesting type of migration is provided by nomadism. Nomadism is
characterized by permanent migration. Tribes of hunter- gatherers move from region to
region following the availability of resources [game and harvests] throughout the seasons
[see Cabeza de Vaca, 1555], so the economic explanation addresses satisfactorily their
seasonal migrations.
However, there are certain kinds of nomadism that defy the explanations of
migration presented above. The case of the Gypsies
3
[or Roma, Rom
4
, or Romani people]
is one of them. Despite the fact that in their history
5
the Gypsies have suffered
innumerous persecutions and expulsions [see Hancock, 1987], no one would argue that
their permanent migration pattern is always consequence of expulsions
6
. In the same
vein, some of their migrations may have been stimulated by better economic perspectives
elsewhere; nevertheless it is hard to explain their permanent migration as resulting solely
from economic aspects. Therefore, no matter if in a given instant of time the migration of
the Gypsies is triggered by economic reasons or forced expulsions, what makes their

2
See Faria (1998) for an analysis of the expulsion of the Jews from Spain in 1492. Despite being a forced
migration, individuals could decide to stay in Spain by rejecting Judaism and converting to Catholicism.
3
The name Gypsy is the shortening of Egyptians, because in the middle-ages dark-skinned people from
the Middle-East had been brought to Europe before the arrival of the Roma [Gypsies, see next footnote]
were loosely called "Egyptians". In The Hunchback of Notre-Dame (1831), Victor Hugo makes the poet
Pierre Gringoire to wonder about the 16 year-old gypsy girl Esmeraldas name: Of what language can that
word be?- it must be Egyptian[1993, p.44]. Some authors [e.g., Russell, 1998] find the word "Gypsy" a
derogatory, pejorative and offensive term to the Roma. Of course, in this paper the name of Gypsies
designate the Roma people without any prejudice.
4
Actually, the Rom also designate one of the three populations of Roma and refers to the Romani of
western Europe, the ones that are the focus of this paper. The remaining two populations of Roma are the
Dom of eastern Europe and the Lom of central Europe.
5
See Hancok (2002) for a history of the Rom. Lee (1998) provides a short account of their history.
6
The Roma of Romania were enserfed [e.g., Prodan, 1990] [from around 1500 to 1864] and of course were
less mobile than the other Roma populations in Europe. Other episodes of enslavement of Roma, for
shorter periods, occurred in Spain and Portugal and some of their American colonies [Hancock, 1997].
5
migration pattern different is the fact that they keep moving from one place to another
mainly by their own volition.
In fact, as Borrow ([1841], 1996, p. 17) pointed out:
() the Gypsy is like Cain, a wanderer of the earth; for
in England the covered cart and the little tent are the
houses of the Gypsy, and he seldom remains more than
three days in the same place

the citation above conveys the idea that the Gypsies, at least whenever possible, migrate
for the sake of migration. It is as if migration creates a habit that ends up characterizing
the people as a whole: Gypsies to be Gypsies need to migrate and keep migrating. This
leads to the idea that Gypsies derive satisfaction from migration and the habits associated
with it. The reason for this may lay in the fact that Gypsies value "freedom" a lot
7
.
Settling in a specific place or country would imply, on the one hand, in investing in fixed
capital, such as real states, houses, etc, and, on the other hand, would imply in mixing
with other people and therefore taking the risk to dilute their culture and heritage
8
.
Indeed, many aspects, if not the main traits, of their culture are permeated or can be
traced back to their previous migrations
9
.
This is exactly the insight of this paper. It explains permanent migrations, such as
the Gypsies, through the simple idea of habit formation. The habit formation hypothesis
has gained strength in the literature with the work of Duesenberry [1949] on habit

7
I owe this point to Miguel Lon-Ledesma.
8
Beynon (1936) exposes the view that Gypies are pariahs, as a consequence they live socially and spatially
on the periphery of the community in which they make their living.
9
This certainly holds true for their language that borrowed words and terms from many countries were they
lived for a while. It is also acknowledged by The Patrin Web Journal (1999) that Romani customs and
traditions are as diverse as the number of Roma nations and the countries they inhabit. Romani culture is
diverse and there is no universal culture per se, but there are attributes common to all Roma: loyalty to
family (extended and clan); belief in Del (God) and beng (the Devil); belief in predestiny; Romaniya,
standards and norms, varying in degree from tribe to tribe; and adaptability to changing conditions.
Integration of many Roma into gajikan (non-Roma, or foreign) culture due to settlement has diluted many
Romani cultural values and beliefs. Not all tribes have the same definition of who and what is "Roma."
6
formation in consumption. Recently this hypothesis has been applied in a variety of cases
such as addiction [Becker and Murphy, 1988], cyclical consumption [Dockner and
Feichtinger, 1993], labor supply [Faria, 2002], and exchange rate determination
[Mansoorian and Neaime, 2002] to quote a few. Departing from the focus on
consumption, Faria and Len-Ledesma (2004) extended the idea of habit formation to
describe the formation of working habits, which helps explain many observed cultural
differences towards attitudes to work. The present paper reinforces the view that the habit
formation idea should not be confined to consumption but can and should be applied to
other economic variables. Here, the hypothesis of habit formation is extended to study the
formation of migration patterns, in particular, permanent migration.
The objective of this paper is to provide a simple dynamic model to explain
permanent migrations, such as the Gypsies, by the formation of migration habits. The
model derives the optimal levels of Gypsies consumption, migration, migration habits
and income, as a function of the importance of habits, the relative importance of recent
migrations on habit formation, Gypsies rate of time preference, and the marginal impacts
of actual consumption and migration on consumption time variation.

2. The Model
Table 1: Endogenous Variables and Parameters
ENDOGENOUS VARIABLES PARAMETERS
M = Migration = Gypsies rate of time preference

H = Migration habits = Relative weights of migration at different
times
C = Consumption = Index of the importance of migration habits
Y = Income a = Marginal impact of actual consumption on
consumption time variation
7
= Co-state variable associated with consumption
= Co-state variable associated with migration habits
b = Marginal impact of actual migration on
consumption time variation

The representative agent is the chief of a clan of Gypsies. He cares about
migration and the habits associated with it, because these habits constitute great part of
their culture. As exposed in the introduction, what characterizes Gypsies is their mobility.
Thus Gypsies derive satisfaction from migration (M) and migration habits (H). This idea
is captured by the following instantaneous utility function: H M H M U log log ) , ( + = ,
where indexes the importance of migration habits.
Migration habits are acquired by past migration, and in line with the literature
[e.g., Carroll et al., 2000], the stock of migration habits is a weighted average of past
migrations. The time variation of the stock of migration habits is:
] [ H M H =

(1)
where
dt
dX
X

denotes the time variation of variable X, and >0 stands for the relative
weights of migration at different times. A larger indicates that recent migration is more
important in habit formation than past migrations.
In this model, the consumption pattern of Gypsies is not a choice variable.
Provided that Gypsies have to migrate and keep migrating, their consumption pattern is
beyond their control, since it varies with the economic conditions from place to place. In
this sense we assume that Gypsies consumption evolves according to two factors: actual
consumption (C) and migration (M). As migration involves costs, they are reflected
negatively on the evolution of Gypsies consumption and captured by parameter b.
8
Concerning the impact of present consumption on the time variation of
consumption, we assume that if instead of keeping migrating, the Gypsies settled
voluntarily in a given western European country [on the condition they were allowed to
stay], we would expect the rate of growth of their consumption to increase as it did with
the native populations. In line with the increase in the standard of living of western
Europe over the past 500 years, we assume that in the absence of migration [i.e., b=0],
the rate of growth of Gypsies consumption would be positive and, for simplicity,
constant and equal to a.
Therefore, the evolution of Gypsies consumption is described by the following
expression:
bM aC C =

(2)
The representative Gypsy maximizes a discounted, infinite stream of utility:
dt e H M
t
M
Max

+
0
] log [log
subject to equations (1) and (2), where the parameter denotes Gypsies rate of time
preference.
The current value Hamiltonian of this problem is:
] [ ] [ log log H M bM aC H M J + + + =
where is the co-state variable associated with consumption and is the co-state
variable associated with migration habits.
The first order conditions are:
0 0
1
= + =

b M J
M
(3)
9
] [ a J
C
= =

(4)
] [
1
= =

H J
H
(5)
plus equations (1) and (2) and the transversality conditions.
The steady state solution of this model, 0 = = = =

H C , is the following:
H M H = =

0 (6)
bM aC C = =

0 (7)
= = =

a 0 (8)
1
] [ 0

= + = H (9)
0 0
1
= + =

b M J
M
(10)
Without loss of generality we can assume 1 = = in equation (8). There remain
four equations [(6), (7), (9) and (10)] for four unknowns: M, H, C, and . Notice that by
introducing equations (6) and (10) into (9) and solving for M, it yields the steady state
level of migration (M*):
) (
1
*

+
+ =
b b
M (11)
The equilibrium level of migration habits, H*, immediately follows from equation
(6) and it is the same as the equilibrium value of migrations:
) (
1
*

+
+ =
b b
H (12)
The steady state value of consumption, C*, is found by substituting M* into
equation (7):
10
) (
1
*

+
+ =
a a
C (13)
In order to assess the equilibrium income of the Gypsies, Y*, it is important to
stress that an implicit assumption of this model is that Gypsies do not save and,
consequently, do not accumulate capital [Gmelch, 1986]. Therefore their actual income
10

is allocated between only two alternatives: actual consumption and actual migration
costs, ) (M , which are directly proportional to migration: 0 ) ( ' > M . Given that the
equilibrium values of consumption and migration are determined above, the equilibrium
income of Gypsies is:
*) ( * * M C Y + = (14)
The equilibrium solutions (11)-(14) show the endogenous variables of the model
as functions of the parameters: importance of habits, the relative importance of recent
migrations on habit formation, Gypsies rate of time preference, and the marginal impacts
of actual consumption and migration on consumption variation. The comparative statics
analysis of the steady state solutions [see Appendix] allows us to assess the impact of the
parameters on the endogenous variables of the model. They are presented in Table 2
below:
Table 2: The impact of parameters on the endogenous variables
M* H* C* Y*
a 0 0 (-) (-)
b (-) (-) 0 (-)
(+) (+) (+) (+)
(+) (+) (+) (+)

10
Borrow (1841) describes the occupations of the Gypsies from Russia to Spain. In general, the women
specialize in fortune-telling and entertainment, such as singing and dancing, while the men are tinkers and
smiths, a particular trade is as manufacturers of horseshoes. Curiously, in the sixteenth century Spain
vagabonds were defined as including Gypsies and foreign tinkers, and the penalty for vagabondage include
a number of years on the galleys [see Thompson, 1968].
11
(-) (-) (-) (-)

From Table 2 it follows that all endogenous variables are impacted in the same
way by the parameters of the model, with the only exception of parameters a and b. An
increase in the Gypsies impatience, captured by an increase in their rate of time
preference , decrease the equilibrium levels of migration, M*, migration habits, H*,
consumption, C*, and income, Y*. An increase in the relative importance of recent
migration in habit formation, given by , or in the importance of migration habits, given
by , increases the equilibrium levels of M*, H*, C* and Y*. An increase in the marginal
impacts of actual consumption and migration on consumption variation, given
respectively by a and b, decrease income. Changes in a do not affect H* and M* and
decrease C*. Changes in b do not affect C*, but decrease M* and H*.

3. Concluding Remarks
This paper analyzes permanent migrations, such as the Gypsies, by the formation
of migration habits. The history of the Gypsies, at least in western Europe, is
characterized by constant migration, which makes it difficult to explain it relying solely
on economic reasons or forced expulsions. Actually, one of the main characteristics of
Gypsies is their continual mobility. The permanent migration behavior becomes a trait of
the people, it becomes a habit. By modeling the formation of this habit in a simple
dynamic setup this paper describes the determination of migration and migration habits as
well as the consumption pattern and income determination of the Gypsies.
It is shown that an increase in the importance of migration habits and in the
relative importance of recent migration in habit formation increase the steady state
12
equilibrium value of migration, migration habits, consumption and income. While an
increase in the Gypsies rate of time preference decrease these equilibrium values.

Appendix:
Comparative statics analysis:
0
*
; 0
*
; 0
*
; 0
*
; 0
*
= < > > <
da
dM
d
dM
d
dM
d
dM
db
dM


0
*
; 0
*
; 0
*
; 0
*
; 0
*
= < > > <
da
dH
d
dH
d
dH
d
dH
db
dH


0
*
; 0
*
; 0
*
; 0
*
; 0
*
= < > > <
db
dC
d
dC
d
dC
d
dC
da
dC


0
*
; 0
*
; 0
*
; 0
*
; 0
*
< < > > <
da
dY
d
dY
d
dY
d
dY
db
dY


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