Intra-household Decision Models of Residential and Job Location

Residential location decision is often a household joint decision involving several decision-makers. These different decision-makers usually have diverging preferences, especially in dual-earner households, when spouses work at different locations. Since about half a century, literature on residential location has studied in great detail the influence of socio-demographic characteristics (and in particular the differences between females and males or between multiple-worker and single-worker households). However, there is no research devoted to the within-family joint decision process leading to residential location decision (and work-place decisions). In the context of Paris Area, we analyze differences between spouses’ values of commuting times and show that spouses’ disparities in commuting decisions is a key element in the intra-household decision process. The single-worker household approach leaves aside by construction important intra-household considerations that influence commuting time and accessibility to jobs. We review different models useful to study intra-household decisions in dual-earner households. To do that, we base our analysis on the framework introduced by Chiappori, de Palma, Picard, and Inoa (2013), which applies the collective approach of household behavior(Chiappori, 1988; Chiappori, 1992) to describe residential location choice of dual-earner households. This collective approach has been used in several economic fields, but not in urban and transport economics so far. Furthermore, we argue that the framework developed by Inoa, Picard, and de Palma (2013), can also be adapted to analyze the joint residential and job location decisions in a two-worker household. The analysis is based on two accessibility variables (one for each spouse) embedded in a three-level nested Logit model which is used to study the interdependence of residential and workplace locations, while accounting for variation of preferences for job types across individuals.