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Household decision making on commuting and the commuting paradox

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Abstract

This paper explores the commuting paradox in the context of two-partner households by estimating the relationship between the subjective well-being of spouses and their commuting distances. Some of the former literature has found evidence that individuals are not fully compensated for changes in commuting (the commuting paradox). We study unitary, cooperative, and non-cooperative decision-making models to explore which describes the household decision on commuting in the data. We use panel data from the German Socio-Economic Panel (GSOEP). The regressions show clear evidence for cooperative household decision making on commuting distances (time) and do not show evidence of the commuting paradox. These results are robust in several robustness checks, including alternative definitions of household utility.

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Notes

  1. We consider spouses as all couples sharing one household, which also applies for quasi-marital situations.

  2. See also Hotchkiss and White (1993) and Tscharaktschiew and Hirte (2010) for a variety of household structures in an urban economic framework.

  3. In general, the literature in urban economics has a substantial body of work on commuting and its various aspects of economic analysis (see Rouwendal and Nijkamp 2004; Rouwendal 2014). In addition to the approach of Stutzer and Frey (2008), other researchers estimated the willingness to pay for commuting using hedonic wage regressions (e.g., van Ommeren et al. 2000; Russo et al. 2012; Dauth and Haller 2016).

  4. To reduce complexity, we focus on static models. For dynamic models, see Chiappori and Mazzocco (2017).

  5. As Chiappori and Mazzocco (2017) note, three models imply the same outcome. The Samuelson (1954) welfare index as the weighted sum of individual utility; the rotten kid approach of Becker (1974), modified by Bergstrom (1989); and transferable utility.

  6. A simple function is the sum of the weighted individual utility \(U_{h} = \gamma U_{f} \left( {r,w_{f} ,D_{f} ,I} \right) + (1 - \gamma )U_{g} \left( {r,w_{g,} ,D_{g} ,I} \right)\), where the weights are constant.

  7. Chiappori and Mazzocco (2017) show that the cooperative model is not defined if the weights are ½. In that case, we apply the unitary model.

  8. For an overview of methodology issues arising from cardinality and ordinality of life satisfaction, see Dickerson et al. (2014), Ferrer-i-Carbonell and Frijters (2004) or Kahneman and Krueger (2006).

  9. The BUC estimator is implemented in Stata using the feologitbuc command proposed by Baetschmann et al. (2015). The Dickerson et al. (2014) BUC estimator is also used. The results of the latter are available from the corresponding author upon request and show similar results.

  10. The estimator was kindly provided by Dickerson et al. (2014).

  11. We also tested the baseline regression model without the correction. The results remain robust and are available upon request.

  12. Results available upon request.

  13. Households in which the partners earn the same income are excluded.

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Acknowledgements

Funding for proofreading was provided by Program great!ipid4all supported by the DAAD and the Graduate Academy of TU Dresden.

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Authors and Affiliations

  1. Institute for Transport and Economics, Friedrich List Faculty of Transportation and Traffic Sciences, Technische Universität Dresden (Dresden University of Technology), TU Dresden, 01062, Dresden, Germany

    Georg Hirte & Ulrike Illmann

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  1. Georg Hirte
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  2. Ulrike Illmann
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Correspondence to Ulrike Illmann.

Appendix

Appendix

See Tables 7, 8, 9 and 10.

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Hirte, G., Illmann, U. Household decision making on commuting and the commuting paradox. Empirica 46, 63–101 (2019). https://doi.org/10.1007/s10663-018-9426-6

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