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Do rich households live farther away from their workplaces?

Listed author(s):
  • Eva Gutierrez Puigarnau

    ()

  • Jos N. van Ommeren (VU)

One of the classic predictions of urban economic theory is that high-income and low-income households choose different residential locations and therefore, conditional on workplace location, have different commuting patterns. According to theory, the effect of household income on commuting distance may be positive or negative. Empirical tests of this effect are not standard, due to reverse causation and lack of good control variables. To address reverse causation, estimates of household income on commuting distance are derived using changes in distance through residential moves keeping workplace location constant. Our results show that the (long-run) income elasticity of distance is non-negative and around 0.14 for dual wage-earners.

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Paper provided by CPB Netherlands Bureau for Economic Policy Analysis in its series CPB Discussion Paper with number 244.

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Date of creation: May 2013
Handle: RePEc:cpb:discus:244
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  9. Chul-In Lee, 2001. "Finite Sample Bias In Iv Estimation Of Intertemporal Labor Supply Models: Is The Intertemporal Substitution Elasticity Really Small?," The Review of Economics and Statistics, MIT Press, vol. 83(4), pages 638-646, November.
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