01127298

Component

https://doi.org/10.3141/2133-10

http://scholar.google.com...ller&publication_year=2009

This paper presents a reference-dependent model for residential location choice. The key contribution of the model is its incorporation of reference dependence that explicitly recognizes the role of the status quo and captures asymmetric responses toward gains and losses in making location choice decisions. The study uses a retrospective residential search survey and a dwelling supply data set from the Toronto Real Estate Board in Ontario, Canada, to estimate the model at the elemental level of individual dwelling units. The study applies a mixed logit formulation that captures unobserved heterogeneity and avoids imposing independence of irrelevant alternatives restrictions on the choice probabilities. Several types of variables, including dwelling characteristics, land uses and other zonal attributes, accessibility measures, and household sociodemographics, are tested in the model. Although the current dwelling is assumed to be the reference point in framing evaluation of alternative dwellings, all gains and losses are measured by a comparison of current and prospective dwellings in the modeling framework. The results reveal that households prefer gains in the number of bedrooms, but they are more sensitive to the equal amounts of losses. A similar loss aversion attitude is observed for the percentage of open areas and unemployment rate. It is also found that decision makers are sensitive only to the losses for the level of service attributes. The reference-dependent model performs better than a conventional location choice model in terms of model fit and provides important behavioral insights.

01147880

09-3471

English

pp 92-99

2009

Transportation Research Record: Journal of the Transportation Research Board

9780309142748

Print

References (55) ; Tables (3)

Behavior; Choice models; Decision making; Dwellings; Households; Residential location

Mixed logit models; Relocation

Toronto (Canada)

Highways; Planning and Forecasting; I72: Traffic and Transport Planning

TRIS, TRB, ATRI

Jan 30 2009 7:53PM

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