Location Decisions Of Households Research Articles

Affordable Housing and City Welfare

Abstract Housing affordability is the main policy challenge for most large cities in the world. Zoning changes, rent control, housing vouchers, and tax credits are the main levers employed by policymakers. How effective are they at combatting the affordability crisis? We build a dynamic stochastic spatial equilibrium model to evaluate the effect of these policies on the well-being of its citizens. The model endogenizes house prices, rents, construction, labour supply, output, income, and wealth inequality, the location decisions of households within the city as well as inter-city migration. Its main novel features are risk, risk aversion, and incomplete risk-sharing. We calibrate the model to the New York metropolitan statistical area. Housing affordability policies carry substantial insurance value but affect aggregate housing and labour supply and cause misallocation in labour and housing markets. Housing affordability policies that enhance access to this insurance especially for the neediest households create substantial net welfare gains.

Simulating the co-emergence of urban spatial structure and commute patterns in an African metropolis: A geospatial agent-based model

Urban spatial structure and mobility patterns co-evolve. A fundamental process that underpins the emergent structure of cities and commuting patterns is location choice with respect to housing and employment. Consequently, location choice models constitute important sub-components of land use-and-transport-interaction (LUTI) and urban growth models. This paper documents the development and application of the Metropolitan Location and Mobility Patterns Simulator (METLOMP-SIM). METLOMP-SIM is a geospatial agent-based model that simulates how urban structure and travel patterns co-emerge, as a function of the location decisions of heterogeneous households and individuals within a spatially-explicit urban context. After specifying a generic conceptual model that identifies the model's structure, entities and agents' decision-making framework, METLOMP-SIM is implemented using the Kumasi Metropolis in Ghana, Sub-Saharan Africa as case study. Overall, the implemented model demonstrates that the encoded micro-scale behaviour of households and individuals are able to mimic some macro-scale residential and job location patterns, and patterns of home-work trip flows that closely match patterns in the case study metropolis. The current model represents property and job market dynamics in both their ‘formal’ and ‘informal’ manifestations, making it potentially relevant to dynamic, agent-based LUTI model development and applications in Sub-Saharan African cities.

Neighborhood effects and housing vouchers

Researchers and policy makers have explored the possibility of restricting the use of housing vouchers to neighborhoods that may positively affect the outcomes of children. Using the framework of a dynamic model of optimal location choice, we estimate preferences over neighborhoods of likely recipients of housing vouchers in Los Angeles. We combine simulations of the model with estimates of how locations affect adult earnings of children to understand how a voucher policy that restricts neighborhoods in which voucher‐recipients may live affects both the location decisions of households and the adult earnings of children. We show the model can nearly replicate the impact of the Moving to Opportunity experiment on the adult wages of children. Simulations suggest a policy that restricts housing vouchers to the top 20% of neighborhoods maximizes expected aggregate adult earnings of children of households offered these vouchers.

Becoming more polycentric: public transport and location choices in the Munich Metropolitan Area

ABSTRACT The Munich Metropolitan Area (MMA) is embarking on becoming a more polycentric urban region. For long, the monocentric city model has provided strong explanatory power in understanding the location decisions of private households and firms. However, this model has been challenged by the emergence of large, polycentric city-regions. Increasing commute ranges and the spatial reorganization of economic activities show patterns of concentration and deconcentration at the same time but on different spatial scales. This paper gives an overview of and theorizing about the spatial driving forces and development within recent years. We use the interplay of agglomeration and network advantages to describe the spatial evolution of the MMA where new secondary centers emerge. Publicly available data and a large-scale web-survey provide the basis for descriptive and multivariate statistical analyses. We find – maybe not surprisingly that still the same driving forces of the monocentric city model – accessibility and economic competition – are at work: the MMA’s public transport rail network still forms a radial and monocentric system, while the present use of space by inhabitants shows an increasingly polycentric pattern with explicit tangential relations. We then discuss the future spatio-functional development path of the MMA by pitching the current strong population and employment growth with its tendency toward metropolisation against an alternative development path with competing driving forces. We conclude with visualizing and discussing the alternative spatial development that simultaneously projects concentration, deconcentration, and dispersion dynamics.

U.S. HOUSEHOLD PREFERENCES FOR CLIMATE AMENITIES: DEMOGRAPHIC ANALYSIS AND ROBUSTNESS TESTING

We estimate how climate amenities influence where households decide to reside in the United States with two main objectives in mind: (i) to produce estimates with sufficient demographic detail to inform demographic population projections for use in climate impact analysis; (ii) to study the robustness of estimates from the existing literature. With respect to the former goal, we find important differences in job-related migration motives by age group and in the overall propensity to migrate among households with children. With respect to the latter aim, our framework shares a common methodological approach with other, recent attempts to recover climate preferences, allowing us to explore the consequences of a number of key assumptions in a systematic manner. Consistent with the existing literature, we find relatively robust estimates of the impact of the frequency of extreme heat days on household location decisions. The impacts of other common measures of climate, including the frequency of extreme cold days, average summer and winter temperatures, annual precipitation, humidity and frequency of sunshine, do not show a strong enough signal in the data to be estimated with precision.

Land tenure and land-use in a developing city: A quantitative spatial model applied to Kampala, Uganda

Land rights and tenure systems are an important factor behind poor housing and inefficient land-use in developing country cities. In Kampala, Uganda, four systems of land tenure coexist, allowing a detailed study of the effects of these on household and firm location decisions. Spatially disaggregated data across the city suggest that the presence of a traditional land tenure system (called mailo) skews land-use towards informal housing and away from business and commercial activities. Using a structural model of the city we show that this due to mailo having a positive value for its occupants, attributable to mailo-specific amenity benefits and/ or rent caps. We use the model to investigate the effect of converting all mailo land in the city to leasehold. Despite direct loss of amenity experienced by mailo residents, aggregate city income may rise substantially because of more efficient land-use. Manufacturing firms move into formerly mailo areas and form new clusters of activity. This increases urban wages, particularly among the low skilled, and raises aggregate urban real incomes by 2% in the absence of localisation economies and as much as 6.7% in the presence of such economies of scale.

Wpływ polityki spójności na jakość życia w dużych miastach na Mazowszu

Contemporary urban policies pay great attention to improving the quality of life of the inhabitants. Such an increasing interest in the quality of life is caused by its crucial importance for the location decisions of households and businesses. In recent years, urban development has been largely financed by EU cohesion policy funds. The paper intends to identify the areas in which the quality of life of the inhabitants of large cities in Mazovia has improved thanks to the implementation of cohesion policy. The study took into account large cities in Mazovia with over 100,000 inhabitants, i.e. Warsaw, Radom and Plock. The survey is based on data collected for the research project: ‚The impact of the cohesion policy on urban development in 2007–2013’, provided by the Ministry of Development. This includes in-depth interviews with representatives of units responsible for development strategy in the cities covered by the survey and a questionnaire survey among beneficiaries of projects co-funded by EU funds. An analysis of databases of projects implemented in large cities in Mazovia, financed with the participation of EU funds, as well as a research of literature on the quality of life in cities in Mazovia were also conducted. The results indicate that the inhabitants see the most improvement in the quality of life in connection with better transport in the cities. The quality of life has increased thanks to faster and more comfortable commuting to work, which leaves more time for other activities and spending free time.

Affordable Housing and City Welfare

Housing affordability is the main policy challenge for most large cities in the world. Zoning changes, rent control, housing vouchers, and tax credits are the main levers employed by policy makers. How effective are they at combatting the affordability crisis? We build a dynamic stochastic spatial equilibrium model to evaluate the effect of these policies on the well-being of its citizens. The model endogenizes house prices, rents, construction, labor supply, output, income and wealth inequality, the location decisions of households within the city as well as inter-city migration. Its main novel features are risk, risk aversion, and incomplete risk-sharing. We calibrate the model to the New York MSA. Housing affordability policies carry substantial insurance value but affect aggregate housing and labor supply and cause misallocation in labor and housing markets. Housing affordability policies that enhance access to this insurance especially for the neediest households create substantial net welfare gains.

The role of subjective risk perceptions in shaping coastal development dynamics

Social and economic costs in coastal zones resulting from natural hazard events, such as hurricanes, are increasing. Household residential location decisions and adaptive behaviors (i.e., purchasing insurance) are influenced by perceived risk of storms events, and can have long-term consequences for development patterns and regional resilience. Perceived risks may be capitalized into housing prices in hazardous areas, but the attraction of coastal amenities may dampen market responses to risk information. Empirical studies provide contradictory conclusions about the effect of storm events on housing market dynamics, and thus the decision-making processes leading to post-storm residential location and insurance purchase choices remain unclear. Here, an economic agent-based model (ABM) of coupled housing and land markets (CHALMS), adapted to a coastal setting, or C-CHALMS, is used to investigate alternative decision-making models and associated behavioral mechanisms driving post-storm responses. A pattern-oriented modeling (POM) and abductive reasoning approach is used to compare the ability of alternative decision-making models to explain empirical patterns of housing and insurance market dynamics. By explicitly modeling individual decision-making, results demonstrate that post-storm location and insurance purchasing decisions vary greatly within a coastal landscape. Coastal amenities dampen the effects of storm events on housing price dynamics for properties immediately adjacent to the coast, while areas with the lowest risk of damages (and lowest coastal amenities) are most responsive to storm events. Further, psychological factors, such as the perceived salience of positive and negative consequences, explain dynamics of insurance policy uptake after storms better than rational economic decision-making alone.

Household location decisions and the value of climate amenities

We value climate amenities by estimating a discrete location choice model for US households. The utility of each metropolitan statistical area (MSA) depends on location-specific amenities, earnings opportunities, housing costs, and the cost of moving to the MSA from the household head’s birthplace. We use the estimated trade-off among wages, housing costs, and climate amenities to value changes in mean winter and summer temperatures. We find that households sort among MSAs as a result of heterogeneous tastes for winter and summer temperatures. Preferences for winter and summer temperatures are negatively correlated: households that prefer milder winters, on average, prefer cooler summers, and households that prefer colder winters prefer warmer summers. Households in the Midwest region, on average, have lower marginal willingness to pay to increase winter and reduce summer temperatures than households in the Pacific and South Atlantic census divisions. We use our results to value changes in winter and summer temperatures for the period 2020 to 2050 under the B1 (climate-friendly) and A2 (more extreme) climate scenarios. On average, households are willing to pay 1 percent of income to avoid the B1 scenario and 2.4 percent of income to avoid the A2 scenario.

Is travel based residential self-selection a significant influence in modal choice and household location decisions?

This paper examines if residential self-selection can be observed in the population of the Greater Dublin Area and analyses the interactions that occur between travel choices and household location decisions. The research is based on data collected through a postal survey issued in April 2014.The paper outlines the differences observed in travel behaviour across contrasting land-use areas; with the findings showing higher use of sustainable modes for residents of denser, mixed-use urban areas with greater public transport options. Travel-based residential self-selection is a contributory factor to modal split characteristics but not to an extent that would invalidate the positive role of land-use measures in promoting sustainable travel. The study found that while transport is an important factor in choosing where to live, it is not the primary factor for all residents and its role is dependent on the characteristics of the respondent involved.The key conclusion is that residential self-selection does not occur to such an extent that it is more important than land-use factors in determining modal-split characteristics. However, it remains a significant contributory factor for certain populations when sustainable modes are considered. The paper highlights the importance of taking self-selection tendencies and housing characteristics into account when creating land-use-transport policies to reduce car dependency and discusses the role of the urban region in producing self-selection behaviour.

Develop first, make amends later: accessibility within residential neighbourhoods in Ghana

Accessibility is frequently reported in transportation and urban planning studies as an important factor in the location or design of residential neighbourhoods. But, to what extent does accessibility influence residential location decisions of households remains unknown in urban Ghana. This paper uses household surveys and agency consultations to examine the relative importance of accessibility (i.e. street connectivity, motorability and mobility) in households’ residential location choices in the Adenta Municipality, Ghana. The experiences described by urban households indicate a strong association with accessibility in their location decisions. This implies that areas with poor street connectivity, motorability and mobility will possibly tend to be less attractive to would-be residents. The study further revealed that household respondents do not merely locate in areas just for the sake of it, rather, they are informed by a variety of accessibility attributes among them include cost of travel, proximity to road, street type, distance to work, travel time, proximity to work and traffic-related nuisance. As a result, although many household respondents (59.74%) developed their residential units in areas with limited or no accessibility, they expressed strong appreciation of the importance of, and the need for accessibility in residential neighbourhoods to ensure effective functionality of the municipality, in relation to connecting activity zones such as work places, shopping and recreational areas. Planning implications are further presented.

Rural‐Urban Interdependence: A Framework Integrating Regional, Urban, and Environmental Economic Insights

Economic development in rural areas affects the natural environment, which in turn affects economic growth—both rural and urban. These shared interests and feedback effects in the natural environment are increasingly recognized as important economic and political issues, and necessitate a new framework for better understanding them. This article asks why such a framework does not exist and why it should be developed. It then presents such a framework by integrating regional, urban, and environmental economic insights. The framework focuses on the interactive location decisions of firms and households and centripetal forces for concentration and centrifugal forces for decentralization. The article captures the economic and environmental consequences of rural‐urban relocation and feedback effects through changes in agglomeration economies, congestion costs, natural and social amenities, and the location of economic opportunities. Results show that some feedback effects reinforce the initial forces, but others weaken them. We present two examples to demonstrate the application of the framework. The first focuses on how agglomeration economies affect the effectiveness of environmental regulation and illustrates the benefits of incorporating regional and urban economic insights into environmental policy analysis. The second example focuses on how conservation policy can create localized amenities that help resource‐rich regions avoid the natural resource curse and illustrates how concepts and perspectives from resource and environmental economics can improve our understanding of regional and rural issues.

Household Location Decisions and the Value of Climate Amenities

We value climate amenities by estimating a discrete location choice model for US households. The utility of each metropolitan statistical area (MSA) depends on location-specific amenities, earnings opportunities, housing costs, and the cost of moving to the MSA from the household head’s birthplace. We use the estimated trade-off among wages, housing costs, and climate amenities to value changes in mean winter and summer temperatures. We find that households sort among MSAs as a result of heterogeneous tastes for winter and summer temperatures. Preferences for winter and summer temperatures are negatively correlated: households that prefer milder winters, on average, prefer cooler summers, and households that prefer colder winters prefer warmer summers. Households in the Midwest region, on average, have lower marginal willingness to pay to increase winter and reduce summer temperatures than households in the Pacific and South Atlantic census divisions. We use our results to value changes in winter and summer temperatures for the period 2020 to 2050 under the B1 (climate-friendly) and A2 (more extreme) climate scenarios. On average, households are willing to pay 1 percent of income to avoid the B1 scenario and 2.4 percent of income to avoid the A2 scenario.

INFORMATION AND THE DEMAND FOR CLEAN AIR

I. INTRODUCTION The idea that household location decisions are influenced by neighborhood characteristics is well established empirically. A number of studies have identified local air quality as a specific neighborhood-level determinant (Bayer. Keohane, and Timmins 2009;. Finney, Goetzke. and Yoon 2011; Kahn 2000; Zabel and Kiel 2000). The findings on air quality suggest that households are able to access and react to information on the environmental good in making location decisions. The average effects air quality has on location, however, may mask substantial variation in response to the amenity across households, many of which may not recognize the good at all. This paper examines the relationship between the household's sensitivity to local environmental quality and its exposure to information on the environment. Households may acquire information on the environment from multiple sources, including personal experience (e.g.. visual observation of smog), informal communication with neighbors, and government pronouncements. A large part of the primary data on air quality in the United States comes from air monitoring stations operated by state governments and the Environmental Protection Agency (EPA). This study estimates the location determinants of a sample of households relocating within California, a state with long-established public information programs on environmental quality. In California, air quality .alerts have served as an important medium conveying information on environmental quality to state residents. The alerts. which normally include information on the possible health effects of poor air quality, occur primarily in urban areas, whose air pollution levels are normally higher than in nonurban areas. Exposure to the alerts could increase household sensitivity to the environment in making location decisions. This study finds evidence of this effect for the sample of California households. II. AIR QUALITY AND PUBLIC INFORMATION PROGRAMS The primary tool local governments use to relay information on the environment is the Air Quality Index (AQI), a measure developed by the EPA. The index ranges from 0 to 500, where under 100 is considered good-to-moderate air quality; 100 to 150 is determined by the EPA unhealthy at least for sensitive groups; and a score over 150 is considered generally unhealthy and comes with an EPA recommendation that those with respiratory .ailments avoid prolonged outdoor exposure and everyone else limit exposure. The EPA previously used the Pollution Standard Index (PSI), replacing it with the AQI in 2000. The two indices are closely related., the AQI modifies the standard used in the PSI for particulate matter and ozone, two of the five pollutants that make up the indices. Ground-level ozone, formed from a chemical reaction of pollutants in the lower atmosphere, is a significant environmental problem specifically in urban areas (1) Exposure to high ozone levels affects lung function; its immediate effects are more serious for those with respiratory diseases, such as asthma. California is one of the few states whose air quality standards are more stringent than federal standards under the Clean Air Act. The state grades the air of every county, determining yearly each county's compliance with state standards for various pollutants. The state's current ozone thresholds are an 8-h average of 0.070 parts per million (ppm), and a 1-h mean of 0.090 ppm; the EPA's current ozone standard is an 8-h average of 0.075 ppm. Yearly, the majority of counties fail state standards; the attainment counties in the state are mainly in nonurban areas. (2) Polluting facilities in non-attainment areas are subject to increased state regulation. The state assigns 35 local governments the task of controlling local air pollution. (3) The districts are the primary source of official state information on local environmental quality, including the dissemination of air quality alerts. …

Spatial targeting of agri-environmental policy and urban development

Widespread public support exists for the provision of natural amenities, such as lakes, rivers or wetlands, and for efforts to preserve these from agricultural pollution. Agri-environmental policies contribute to these efforts by encouraging farmers to adopt environmentally friendly practices within the vicinity of these ecosystems. A spatially targeted agri-environmental policy promotes natural amenities and may thereby affect household location decisions. The purpose of this paper is to investigate the extent of these impacts on the spatial urban structure. We extend a monocentric city model to include farmers' responses to an agri-environmental policy. Our main findings are that the implementation of a spatially targeted agri-environmental policy may lead to some additional urban development, which could conflict with the aim of the policy.

Spatial Targeting of Agri-Environmental Policy and Urban Development

Widespread public support exists for the provision of natural amenities, such as lakes, rivers or wetlands, and for efforts to preserve these from agricultural pollution. Agri-environmental policies contribute to these efforts by encouraging farmers to adopt environmentally friendly practices within the vicinity of these ecosystems. A spatially targeted agri-environmental policy promotes natural amenities and may thereby affect household location decisions. The purpose of this paper is to investigate the extent of these impacts on the spatial urban structure. We extend a monocentric city model to include farmers’ responses to an agri-environmental policy. Our main findings are that the implementation of a spatially targeted agri-environmental policy may lead to some additional urban development, which could conflict with the aim of the policy.

School Quality, School Choice and Residential Mobility

Since the 1990’s the school choice options available to parents have expanded dramatically. As an alternative to their residentially zoned public school, parents in many states can now take advantage of charter schools, magnet schools, inter/intra-district choice plans and vouchers to attend private schools. Since school choice programs weaken the link between school quality and residential location, they have the potential to affect both property values and the residential location decisions of households. In this chapter I first review the literature on the link between residential location decisions and school quality when schooling options are determined by a strict residential-based assignment system. I then survey the emerging theoretical and empirical literature that examines how school choice policies that decouple the strict link between school quality and residential location affect housing markets and residential mobility.

Evaluating the efficiency and equity of federal fiscal equalization

Theoretically, federal transfers that make household location decisions efficient should ignore local cost differences, subsidize positive externalities, and offset differences in federal-tax payments and local taxes levied on non-residents, but not local tax revenues from residents. Transfers that redistribute resources equitably across regions will likely target areas with individuals of low earnings potential or low real incomes. Applying these criteria empirically, Canadian equalization policy appears neither efficient nor equitable, but exacerbates pre-existing inefficiencies and underfunds minorities. Locational inefficiencies cost Canada 0.41% of income annually and cause over-funded provinces to have populations of 30% beyond their efficient long-run levels.

Mobility, housing markets, and schools: Estimating the effects of inter-district choice programs

In theoretical models of residential sorting, a household's location decision is closely linked to its demand for local public services, such as schooling. Since school choice programs weaken the link between residential location and schooling options, they have the potential to affect both property values and residential location choices. Results derived from computable general equilibrium models suggest these effects could be large, but there is limited empirical evidence concerning whether they actually occur. This paper develops and tests predictions concerning the impact of inter-district choice programs on housing values and residential location decisions. Our empirical results strongly confirm our theoretical predictions and the findings of the computable general equilibrium literature: after their states adopt inter-district choice programs, districts with desirable nearby, out-of-district schooling options experience relatively large increases in housing values, residential income, and population density.