A Framework for Transportation and Land Use Integration as a Parallel Constrained Multiple Discrete-Continuous Extreme Value (PC-MDCEV) Home Production Model

Integrated urban models (IUM) typically rely on a measure of accessibility or travel time to form the link between the transportation and land use systems. Such integration does not fully capture the trade-offs made by households in how they spend their limited temporal and monetary budgets. We propose a microeconomic foundation for transportation and land use choice model integration based on the theory of home production. A utility function is developed that considers both household monetary expenditure and individual time use. We address several limitations in previous home production functions. First, the introduction of a parallel constrained multiple discrete-continuous extreme value (MDCEV) structure that allows for the inclusion of multi-person households in the model. Second, travel time is defined as the minimum time required to conduct an activity and deducted from the temporal budget. This assumption has several appealing features. It defines the minimum time to complete an activity as a measure of accessibility. An empirical application is provided for the Greater Toronto Area using a validated synthetic dataset. Empirical results demonstrate an economy of scale in time devoted to home production, analogous to scaling exhibit in market production. It was found that the mix of dwelling types (detached, apartment, etc.) has a significant influence on both time use and consumption. Finally, we provide several directions for future research to advance the practice of urban modelling and better capture the complex dynamics of household decision-making.