What do households want in a neighborhood, and do they get it?

Authors: Deborah Salon*, Arizona State University
Topics: Urban Geography
Keywords: residential choice, discrete choice models
Session Type: Paper
Day: 4/6/2019
Start / End Time: 9:55 AM / 11:35 AM
Room: 8223, Park Tower Suites, Marriott, Lobby Level
Presentation File: No File Uploaded

Residential location choice is the subject of a substantial body of research. Most of this work falls into the category of revealed preference discrete choice modeling. To estimate these models, analysts assume that actual location choices maximize household utility, and construct models that aim to uncover the factors that those households must have been looking for if they made the selections that we observe.

One obvious problem with this approach is the assumption that households are maximizing their utility in the residential location choices they make. In related research, we have found that households are often severely limited in the location options that they are able to seriously consider – by their budgets, by the homes available at the time they need to move, and/or by the expertise of the real estate professional they are working with. There is only limited research that has attempted to introduce realistic “consideration sets” into residential choice modeling, however.

We contribute to this literature by analyzing new survey data collected in 5 US cities that includes revealed-preference (i.e. actual) home location, household stated preferences about homes and neighborhood characteristics, as well as a separate set of responses about the home choice process. These data allow us to identify what households want in a home and neighborhood, how they went about trying to find a home that matched their preferences, and whether they were successful in finding one.

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