Isn't this a case of the market modeling it very well though? It's very undesirable to live somewhere, so wages offered are elevated. The posts aren't filled though, because the wages aren't elevated enough. Occasionally someone who really doesn't mind living out there does come along and take the elevated wages, but mostly the posts go empty. The market is revealing that there's no coincidence of wants [0], and correctly allocating fewer people to the posts. If by "reality" we mean a world where these posts are filled despite costing more to fill than they're worth to someone then yes, markets aren't modeling reality well.