Interdependences between current choices and future expectations in the context of Hanoians’ residential location choices

Abstract

ABSTRACTBased on the theory of backward-looking and forward-looking behaviour, a residential location choice model is established to represent interdependences between current choices and future expectations (FE). The interdependences might be observed not only with respect to a particular alternative in a choice set (within-alternative interdependences), but also between different alternatives (between-alternative interdependences), which are jointly incorporated by using a paired combinatorial logit model. Analysis results using data collected from 13,712 individuals in Hanoi in 2005 confirmed that 26.42–55.28% of the total variance of current residential location choice utility can be explained by FE, while 40.81–99.37% of FE can be captured by current choices (i.e. state dependence). The influence of within-alternative interdependences regarding urban core (UC) residence for low-income individuals is almost double that for medium-to-high-income individuals. For between-alternative interdependences, similar results are observed for both low- and medium-to-high-income groups: it can explain 37.37–58.55% of total variance for suburban residence, but only marginal influence (0.00–0.89%) is confirmed for UC residence. These findings suggest that FE cannot be ignored in the analysis of residential location choice behaviour.