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The Effects of Housing Prices, Wages, and Commuting Time on Urban-Rural Residential Choice

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  • So, Kim Sui
  • Orazem, Peter
  • Otto, Daniel

Abstract

An empirical model of joint decisions of where to live and where to work demonstrates that individuals make residential and job location choices by trading off wages, housing prices and commuting costs. Wages are higher in metropolitan markets, but housing prices are also higher in urban areas. Consumers can live in lower priced nonmetropolitan houses and still earn urban wages, but they incur commuting costs that increase with distance from the city. Improvements in transportation that lower commuting time will increase nonmetropolitan populations and will increase the number of nonmetropolitan commuters to metropolitan markets. Equal wage growth across labor markets causes a shift in relative population from rural to urban markets, while an equiproportional increase in housing prices causes a population shift toward rural areas.

Suggested Citation

  • So, Kim Sui & Orazem, Peter & Otto, Daniel, 2001. "The Effects of Housing Prices, Wages, and Commuting Time on Urban-Rural Residential Choice," Staff General Research Papers Archive 1204, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genres:1204
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    1. Averett, Susan L & Hotchkiss, Julie L, 1995. "The Probability of Receiving Benefits at Different Hours of Work," American Economic Review, American Economic Association, vol. 85(2), pages 276-280, May.
    2. David L. Barkley & Mark S. Henry, 1997. "Rural Industrial Development: To Cluster or Not to Cluster?," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 19(2), pages 308-325.
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    2. Cécile Détang‐Dessendre & Florence Goffette‐Nagot & Virginie Piguet, 2008. "Life Cycle And Migration To Urban And Rural Areas: Estimation Of A Mixed Logit Model On French Data," Journal of Regional Science, Wiley Blackwell, vol. 48(4), pages 789-824, October.
    3. Vifill Karlsson, 2011. "The Relationship of Housing Prices and Transportation Improvements: Location and Marginal Impact," Spatial Economic Analysis, Taylor & Francis Journals, vol. 6(2), pages 223-241.
    4. Kamar Ali & M. Rose Olfert & Mark Partridge, 2011. "Urban Footprints in Rural Canada: Employment Spillovers by City Size," Regional Studies, Taylor & Francis Journals, vol. 45(2), pages 239-260.
    5. Sharma, Ajay & Chandrasekhar, S., 2014. "Growth of the Urban Shadow, Spatial Distribution of Economic Activities, and Commuting by Workers in Rural and Urban India," World Development, Elsevier, vol. 61(C), pages 154-166.
    6. Erika Sandow, 2014. "Til Work Do Us Part: The Social Fallacy of Long-distance Commuting," Urban Studies, Urban Studies Journal Limited, vol. 51(3), pages 526-543, February.
    7. José M. Casado-Díaz & Raquel Simón-Albert & Hipólito Simón, 2023. "Gender Differences in Commuting: New Evidence from Spain," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 169(3), pages 907-941, October.
    8. Juan Soto & Milena Vargas & Julio A. Berdegué, 2018. "How Large Are the Contributions of Cities to the Development of Rural Communities? A Market Access Approach for a Quarter Century of Evidence from Chile," Documentos de Trabajo 17060, The Latin American and Caribbean Economic Association (LACEA).
    9. Hu, Beibei & Zhang, Shuang & Ding, Yang & Zhang, Min & Dong, Xianlei & Sun, Huijun, 2021. "Research on the coupling degree of regional taxi demand and social development from the perspective of job–housing travels," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 564(C).
    10. Yan Chen & Xiaohong Chen & Hongshan Ai & Xiaoqing Tan, 2022. "Temperature and Migration Intention: Evidence from the Unified National Graduate Entrance Examination in China," IJERPH, MDPI, vol. 19(16), pages 1-23, August.
    11. Viviana Carriel & Marcelo Lufin & Manuel Pérez-Trujillo, 2022. "Do workers negative self-select when they commute? Evidence for the Chilean case of long-distance commuting," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 69(1), pages 255-279, August.
    12. Ann Verhetsel & Joris Beckers & Michiel Meyere, 2018. "Assessing Daily Urban Systems: A Heterogeneous Commuting Network Approach," Networks and Spatial Economics, Springer, vol. 18(3), pages 633-656, September.
    13. Siqi Zheng & Xiaonan Zhang & Weizeng Sun & Chengtao Lin, 2019. "Air pollution and elite college graduates’ job location choice: evidence from China," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 63(2), pages 295-316, October.
    14. Lorenz, Olga, 2018. "Does commuting matter to subjective well-being?," Journal of Transport Geography, Elsevier, vol. 66(C), pages 180-199.
    15. Angela Stefania Bergantino & Leonardo Madio, 2019. "Intra‐ and inter‐regional commuting: Assessing the role of wage differentials," Papers in Regional Science, Wiley Blackwell, vol. 98(2), pages 1085-1114, April.
    16. Daniel C. Monchuk & Maureen Kilkenny & Euan Phimister, 2014. "Rural Homeownership and Labour Mobility in the United States," Regional Studies, Taylor & Francis Journals, vol. 48(2), pages 350-362, February.
    17. Andrew R. Watkins, 2016. "Commuting Flows and Labour Market Structure: Modelling Journey to Work Behaviour in an Urban Environment," Growth and Change, Wiley Blackwell, vol. 47(4), pages 612-630, December.
    18. Yanhong H. Jin & James W. Mjelde & Kerry K. Litzenberg, 2014. "Economic analysis of job-related attributes in undergraduate students' initial job selection," Education Economics, Taylor & Francis Journals, vol. 22(3), pages 305-327, June.
    19. Natalia Presman & Arie Arnon, 2000. "Commuting Patterns in Israel," Regional and Urban Modeling 283600076, EcoMod.
    20. Gil Viry & Heiko Rüger & Thomas Skora, 2014. "Migration and Long-Distance Commuting Histories and Their Links to Career Achievement in Germany: A Sequence Analysis," Sociological Research Online, , vol. 19(1), pages 78-94, February.
    21. Zhao, Pengjun & Zhang, Yixue, 2019. "The effects of metro fare increase on transport equity: New evidence from Beijing," Transport Policy, Elsevier, vol. 74(C), pages 73-83.

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