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Microeconomic Formulation and Estimation of a Residential Location Choice Model: Implications for the Value of Time

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  • Patricio E. Pérez
  • Francisco J. Martínez
  • Juan de Dios Ortúzar

Abstract

We formulate a microeconomic model of residential location choice behavior as an aggregate of the individual behaviors of household members, subject to individual time constraints and a common income budget. A simplified version of the model is estimated from stated preference rank‐order data, yielding a function that may be interpretated as a conditional indirect utility function. We consider Box‐Tukey transformations, segmentation by income class, and a consistent treatment of data at different rank depths using the simultaneous mixed‐estimation method. Measures of the household's willingness‐to‐pay (through rents) for reducing travel times to work and study in the short run, are interpreted as subjective values of time and compared with such values derived from mode choice models. Our results are plausible, and consistent with recent findings showing that the short‐run benefits of transport projects derived by transport models are larger than benefits measured at the land use system.

Suggested Citation

  • Patricio E. Pérez & Francisco J. Martínez & Juan de Dios Ortúzar, 2003. "Microeconomic Formulation and Estimation of a Residential Location Choice Model: Implications for the Value of Time," Journal of Regional Science, Wiley Blackwell, vol. 43(4), pages 771-789, November.
    • Handle: RePEc:bla:jregsc:v:43:y:2003:i:4:p:771-789
    DOI: 10.1111/j.0022-4146.2003.00320.x
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    Cited by:

    1. Vincenzo Del Giudice & Pierfrancesco De Paola & Torrieri Francesca & Peter J. Nijkamp & Aviad Shapira, 2019. "Real Estate Investment Choices and Decision Support Systems," Sustainability, MDPI, vol. 11(11), pages 1-18, June.
    2. Patricia Yañez-Pagans & Daniel Martinez & Oscar A. Mitnik & Lynn Scholl & Antonia Vazquez, 2019. "Urban transport systems in Latin America and the Caribbean: lessons and challenges," Latin American Economic Review, Springer;Centro de Investigaciòn y Docencia Económica (CIDE), vol. 28(1), pages 1-25, December.
    3. Del Giudice, V. & De Paola, P. & Torrieri, F. & Pagliari, F., 2009. "A decision support system for real estate investment choice," Serie Research Memoranda 0010, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
    4. Cervero, Robert & Kang, Chang Deok, 2011. "Bus rapid transit impacts on land uses and land values in Seoul, Korea," Transport Policy, Elsevier, vol. 18(1), pages 102-116, January.
    5. Jan-Erik Swärdh & Staffan Algers, 2016. "Willingness to accept commuting time within the household: stated preference evidence," Transportation, Springer, vol. 43(2), pages 219-241, March.
    6. Caussade, Sebastián & Ortúzar, Juan de Dios & Rizzi, Luis I. & Hensher, David A., 2005. "Assessing the influence of design dimensions on stated choice experiment estimates," Transportation Research Part B: Methodological, Elsevier, vol. 39(7), pages 621-640, August.
    7. Jia Zhong & Shaoquan Liu & Min Huang & Sha Cao & Hui Yu, 2021. "Driving Forces for the Spatial Reconstruction of Rural Settlements in Mountainous Areas Based on Structural Equation Models: A Case Study in Western China," Land, MDPI, vol. 10(9), pages 1-18, August.
    8. Israel, Emil & Cohen-Blankshtain, Galit, 2010. "Testing the decentralization effects of rail systems: Empirical findings from Israel," Transportation Research Part A: Policy and Practice, Elsevier, vol. 44(7), pages 523-536, August.
    9. Tillema, Taede & van Wee, Bert & Ettema, Dick, 2010. "The influence of (toll-related) travel costs in residential location decisions of households: A stated choice approach," Transportation Research Part A: Policy and Practice, Elsevier, vol. 44(10), pages 785-796, December.
    10. Jae Hong Kim & Francesca Pagliara & John Preston, 2005. "The Intention to Move and Residential Location Choice Behaviour," Urban Studies, Urban Studies Journal Limited, vol. 42(9), pages 1621-1636, August.
    11. Cervero, Robert & Kang, Chang Deok, 2009. "Bus Rapid Transit Impacts on Land Uses and Land Values in Seoul, Korea," Institute of Transportation Studies, Research Reports, Working Papers, Proceedings qt4px4n55x, Institute of Transportation Studies, UC Berkeley.
    12. Hess, Stephane & Bierlaire, Michel & Polak, John W., 2005. "Estimation of value of travel-time savings using mixed logit models," Transportation Research Part A: Policy and Practice, Elsevier, vol. 39(2-3), pages 221-236.
    13. Yanez-Pagans, Patricia & Martinez, Daniel & Mitnik, Oscar A. & Scholl, Lynn & Vazquez, Antonia, 2018. "Urban Transport Systems in Latin America and the Caribbean: Challenges and Lessons Learned," IZA Discussion Papers 11812, Institute of Labor Economics (IZA).
    14. Zheng, Siqi & Fu, Yuming & Liu, Hongyu, 2006. "Housing-choice hindrances and urban spatial structure: Evidence from matched location and location-preference data in Chinese cities," Journal of Urban Economics, Elsevier, vol. 60(3), pages 535-557, November.

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