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A bi-level model of the relationship between transport and residential location

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  • Chang, Justin Sueun
  • Mackett, Roger Laurence

Abstract

This paper explores a bid-rent network equilibrium model which represents the relationship between transport and residential location. The relationship is examined in terms of the competition of decision-makers for locations. The model discusses difficulties in addressing the characteristics of locations, particularly heterogeneity and indivisibility. A hedonic interpretation is included as a way to resolve these challenges. The model investigates the process in which households make their decisions. This process is shown as an n-player non-cooperative game, following the Nash equilibrium for this game, which is defined as well. The game is accompanied by the systematic interactions between transport and land-use. A mutual adjustment process represents these interactions. The three components are structured by a bi-level mathematical program. The final formulation is interpreted as an oligopolistic Cournot game of which consequence is an approximation of the n-player non-cooperative game. The functional relationship between the decision variables of the upper and the lower levels of the bi-level program produces endogenously-determined transport impedance and locational attractiveness. The endogenous network performance indices of the model are expected to overcome the lack of a realistic network equilibrium description in the existing models. A path-based heuristic algorithm and a simple numerical example are presented. Finally, some concluding remarks are given.

Suggested Citation

  • Chang, Justin Sueun & Mackett, Roger Laurence, 2006. "A bi-level model of the relationship between transport and residential location," Transportation Research Part B: Methodological, Elsevier, vol. 40(2), pages 123-146, February.
  • Handle: RePEc:eee:transb:v:40:y:2006:i:2:p:123-146
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    1. repec:eee:transb:v:106:y:2017:i:c:p:464-488 is not listed on IDEAS
    2. Mahyar Amirgholy & Hojjat Rezaeestakhruie & Hossain Poorzahedy, 2015. "Multi-objective cordon price design to control long run adverse traffic effects in large urban areas," Netnomics, Springer, vol. 16(1), pages 1-52, August.
    3. Qian Liu & Chongchao Huang, 2016. "Modeling Business Land Use Equilibrium for Small Firms’ Relocation and Consumers’ Trip in a Transportation Network," Networks and Spatial Economics, Springer, vol. 16(2), pages 497-524, June.
    4. repec:eee:transa:v:105:y:2017:i:c:p:123-137 is not listed on IDEAS
    5. Vincent Viguié, 2015. "Cross-commuting and housing prices in a polycentric modeling of cities," Policy Papers 2015.03, FAERE - French Association of Environmental and Resource Economists.
    6. Ma, Xiaosu & Lo, Hong K., 2012. "Modeling transport management and land use over time," Transportation Research Part B: Methodological, Elsevier, vol. 46(6), pages 687-709.
    7. Ng, Ka Fai & Lo, Hong K., 2015. "Optimal housing supply in a bid-rent equilibrium framework," Transportation Research Part B: Methodological, Elsevier, vol. 74(C), pages 62-78.
    8. Tongfei Li & Jianjun Wu & Huijun Sun & Ziyou Gao, 2016. "Integrated Co-evolution Model of Land Use and Traffic Network Design," Networks and Spatial Economics, Springer, vol. 16(2), pages 579-603, June.
    9. repec:eee:transb:v:103:y:2017:i:c:p:269-290 is not listed on IDEAS

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