Optimal Commuting and Migration Decisions under Commuting Cost Uncertainty

Christian Schmidt

Urban Studies, 2014, vol. 51, issue 3, 477-492

Abstract: The aim of this paper is to assess the implications of economic uncertainty on individual mobility behaviour at the local and regional levels. Focusing especially on uncertainty with respect to the evolution of commuting costs, a model is developed that describes the interrelated decisions of residential choice and the appropriate type of mobility connecting workplace and residence. Results indicate that higher uncertainty about commuting costs increases the number of residentially immobile individuals in that the decision regarding a relocation of residence is accordingly deferred to a later point in time. This also means that individuals initially commuting between residence and workplace remain in this mobility mode despite an apparently favourable net present value of moving to the workplace region.

Keywords: commuting; migration; decision-making; mobility costs; uncertainty; real options (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:sae:urbstu:v:51:y:2014:i:3:p:477-492

DOI: 10.1177/0042098013498286

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