Moving costs and the microeconomics of intra-urban mobility

Amundsen, Eirik S.

doi:10.1016/0166-0462(85)90042-0

Cited by 33 publications

(30 citation statements)

References 10 publications

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“…Of course, the once-only costs also include psychic costs. As far as we know from the literature, no clear empirical estimates of the level of generalised costs of moving residence are available, but these costs are likely to be high (Boehm 1981, Amundsen 1985, Ioannides 1987, Pickles and Davies 1993. In contrast, the results of Van den Berg (1992) show that the exit rate from the job is hardly in¯uenced by the cost of quitting, which might be an indication that job changing costs are low.…”

Section: A Search Frameworkmentioning

confidence: 99%

Job mobility, residential mobility and commuting: A theoretical analysis using search theory

Ommeren¹,

Rietveld²,

Nijkamp³

2000

The Annals of Regional Science

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The decision to move job and the decision to move residence are closely related dynamic discrete choices, as both moves involve a change of commuting distance. This suggests that labour and residential mobility are mutually dependent and should be simultaneously analysed, based on a theory which incorporates these dynamic decisions explicitly. In the present paper, we base our analysis on search theory and choose the point of departure that individuals maximise utility by moving through di¨erent labour market and housing market states, while taking into consideration that moving from one state to another is costly. Based on these assumptions, a search model is constructed and the optimality conditions are derived.One of main conclusions based on the search model is that the e¨ect of factors which cause housing market imperfections (viz. the residential moving costs and the residence arrival rate) have ambiguous e¨ects on he job acceptance and job search behaviour of employed individuals. For some interesting cases however, the e¨ect of the residential moving costs on the job acceptance behaviour can be derived. In contrast, the e¨ect of housing market imperfections on the labour market behaviour of nonemployed persons is determined. We ®nd for example that housing policies which discourage nonemployed persons to move residence (e.g. housing subsidies) also decrease the probability of becoming employed and may therefore unintentionally increase the number of nonemployed persons.

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Section: A Search Frameworkmentioning

confidence: 99%

Job mobility, residential mobility and commuting: A theoretical analysis using search theory

Ommeren¹,

Rietveld²,

Nijkamp³

2000

The Annals of Regional Science

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“…If the outcomes in terms of housing consumption are broadly the same, move-orimprove decisions become cost-minimising problems, where the desired level of consumption is achieved by choosing the lowercost solutionÐ either rehabilitation or moving (Montgomery, 1992;Shear, 1983;Amundsen, 1985;Galster, 1987;Mendelsohn, 1977;Winger, 1973). Where the consumption outcomes are presumed to be more clearly distinct, the costs of the alternative strategies are compared to the marginal bene® ts of the respective choices, which are based on expected future values of the current and an alternative set of housing services (Shear, 1983).…”

Section: Introductionmentioning

confidence: 99%

Moving and Improving: Strategies for Attaining Housing Equilibrium

Littlewood

Munro

1997

Urban Studies

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The concept of equilibrium consumption is central to much housing market analysis, yet analysts must contend with the likelihood that many housing consumers are not at an exact equilibrium level of consumption because of the inhibiting effects of the high cost of moving. This paper explores the theoretical and empirical importance of improvement activity and its relationship with residential mobility in attaining equilibrium housing consumption. The paper argues that previous frameworks have over-simpli® ed the options available to households, by assuming that improving and moving are discrete, alternative ways of attaining an equilibrium level of consumption. Instead, the evidence presented here suggests that recent movers will frequently undertake a programme of improvement activity so that the newly acquired dwelling will, over a period of months or years, more closely match the household' s requirements. This suggests that the price and quality`bundle' chosen at the time of purchase may not, in fact, be an accurate measure of the households current or future equilibrium housing consumption.

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“…One of the main results in the literature on the optimal number of moves is that the optimal residence duration depends positively on the moving costs. Moreover, the residence duration does not depend on the consumption of housing services, because both have been optimally chosen (Amundsen, 1985). Because residence duration is inversely related to the probability of moving residence, it follows that the probability of moving residence, P, depends negatively on the moving costs m and does not depend directly on the property value, V. So:…”

Section: Basic Modelmentioning

confidence: 99%

“…For example, the assumption 5 One expects that δ > 0 and 0 < η < 1, because households tend to increase the consumption of housing services at the beginning and tend to decrease this consumption at the end of their housing career (e.g. Amundsen, 1985). To overcome this empirical difficulty, we will also attempt to estimate β.…”

Section: Basic Modelmentioning

confidence: 99%

See 1 more Smart Citation

New Evidence of the Effect of Transaction Costs on Residential Mobility*

Ommeren¹,

Leuvensteijn²

2005

J Regional Sci

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Abstract. Transaction costs have attracted considerably attention in the theoretical literature on residential mobility. In many European countries, these costs mainly consist of ad-valorem transaction costs. In the current paper, we demonstrate empirically for the Netherlands that the transaction costs have a strong negative effect on the owners' probability of moving. Under a range of different specifications, it appears that a one percent-point increase in the value of transaction costs -as a percentage of the value of the residence -decreases ownership to ownership residential mobility rates by eight percent. The estimates imply that ownership to ownership mobility rates would be 50 percent higher in the absence of the current six percent ad-valorem buyer transaction tax. Our estimates are consistent with the observation that in the Netherlands ad-valorem transaction costs mainly consist of buyer transaction costs.

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Moving costs and the microeconomics of intra-urban mobility

Cited by 33 publications

References 10 publications

Job mobility, residential mobility and commuting: A theoretical analysis using search theory

Job mobility, residential mobility and commuting: A theoretical analysis using search theory

Moving and Improving: Strategies for Attaining Housing Equilibrium

New Evidence of the Effect of Transaction Costs on Residential Mobility*

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