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Estimating the Marginal Willingness to Pay for Commuting

Listed author(s):
  • Jos van Ommeren
  • Gerard J. van den Berg
  • Cees Gorter

With informational frictions on the labor market, hedonic wage regressions provide biased estimates of the willingness to pay for job attributes. We show that a recent theoretical result, which states that the variation in job durations provides a basis for obtaining good estimates, can be generalized to a wide class of search models. We apply this result by estimating the marginal willingness of employed workers to pay for commuting, using Dutch longitudinal data. The average willingness to pay for one hour commuting is estimated to equal almost half of the hourly wage rate. Copyright 2000 Blackwell Publishers

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Article provided by Wiley Blackwell in its journal Journal of Regional Science.

Volume (Year): 40 (2000)
Issue (Month): 3 ()
Pages: 541-563

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Handle: RePEc:bla:jregsc:v:40:y:2000:i:3:p:541-563
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  1. Devine, T.J. & Kiefer, N.M., 1990. "The Empirical Status Of Job Search Theory," Papers 4-90-1, Pennsylvania State - Department of Economics.
  2. Herzog, Henry W, Jr & Schlottmann, Alan M, 1990. "Valuing Risk in the Workplace: Market Price, Willingness to Pay, and the Optimal Provision of Safety," The Review of Economics and Statistics, MIT Press, vol. 72(3), pages 463-470, August.
  3. Heckman, James J. & Singer, Burton, 1984. "Econometric duration analysis," Journal of Econometrics, Elsevier, vol. 24(1-2), pages 63-132.
  4. Hey, John D & McKenna, Chris J, 1979. "To Move or Not to Move?," Economica, London School of Economics and Political Science, vol. 46(182), pages 175-185, May.
  5. van den Berg, Gerard J, 1992. "A Structural Dynamic Analysis of Job Turnover and the Costs Associated with Moving to Another Job," Economic Journal, Royal Economic Society, vol. 102(414), pages 1116-1133, September.
  6. Gerard J. van den Berg, 1990. "Nonstationarity in Job Search Theory," Review of Economic Studies, Oxford University Press, vol. 57(2), pages 255-277.
  7. Hwang, Hae-shin & Mortensen, Dale T & Reed, W Robert, 1998. "Hedonic Wages and Labor Market Search," Journal of Labor Economics, University of Chicago Press, vol. 16(4), pages 815-847, October.
  8. Ann P. Bartel, 1982. "Wages, Nonwage Job Characteristics, and Labor Mobility," ILR Review, Cornell University, ILR School, vol. 35(4), pages 578-589, July.
  9. Wales, Terence J., 1978. "Labour supply and commuting time : An empirical study," Journal of Econometrics, Elsevier, vol. 8(2), pages 215-226, October.
  10. Bartik, Timothy J. & Butler, J. S. & Liu, Jin-Tan, 1992. "Maximum score estimates of the determinants of residential mobility: Implications for the value of residential attachment and neighborhood amenities," Journal of Urban Economics, Elsevier, vol. 32(2), pages 233-256, September.
  11. Timothy J. Gronberg & W. Robert Reed, 1994. "Estimating Workers' Marginal Willingness to Pay for Job Attributes Using Duration Data," Journal of Human Resources, University of Wisconsin Press, vol. 29(3), pages 911-931.
  12. Albrecht, James W. & Holmlund, Bertil & Lang, Harald, 1991. "Comparative statics in dynamic programming models with an application to job search," Journal of Economic Dynamics and Control, Elsevier, vol. 15(4), pages 755-769, October.
  13. Blau, David M, 1991. "Search for Nonwage Job Characteristics: A Test of the Reservation Wage Hypothesis," Journal of Labor Economics, University of Chicago Press, vol. 9(2), pages 186-205, April.
  14. van den Berg, Gerard J & Gorter, Cees, 1997. "Job Search and Commuting Time," Journal of Business & Economic Statistics, American Statistical Association, vol. 15(2), pages 269-281, April.
  15. Zax, Jeffrey S., 1991. "Compensation for commutes in labor and housing markets," Journal of Urban Economics, Elsevier, vol. 30(2), pages 192-207, September.
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