🤖 AI Summary
This study addresses the complex trade-offs households face when choosing residential locations, particularly between commuting costs and relocation decisions. It develops an algebraic utility maximization model that integrates housing costs, commuting expenditures, income affordability (including the 30% rule), social ties, and locational amenities. By uniquely synthesizing classical urban economic theory with contemporary considerations of housing affordability, social networks, and quality of life, the approach yields a concise, interpretable, and readily extensible mathematical decision rule—distinct from more complex discrete choice or agent-based models. The resulting analytical framework offers both theoretical innovation and practical utility, supporting household migration decisions and informing urban policy design, thereby advancing interdisciplinary research at the intersection of urban economics and housing studies.
📝 Abstract
Deciding where to live involves a complex balance between commuting and moving, as households must weigh housing affordability, transportation expenses, access to workplaces, and social ties. Traditional urban economic theories focus on the balance between housing expenses and commuting costs, while modern studies also consider housing affordability, transportation access, and utility maximization. However, few studies have combined these elements into a clear mathematical model that can be used for both policy analysis and household decision-making. This paper introduces an algebraic model for deciding whether to commute or move, expanding on traditional residential location theories by including direct housing and commuting expenses, income-related affordability limits, indirect social and service access costs, and location-based utility within a single utility-maximization framework. The model uses the common 30% housing affordability rule as a constraint, acknowledging that residential choices are also shaped by social networks, access to institutions, neighborhood ties, and quality-of-life factors. The decision rule derived from the model integrates direct financial costs with weighted social benefits and indirect access costs to assess when moving offers more overall utility than staying put and commuting. Unlike complex discrete-choice, nested-logit, or agent-based models, this framework offers a mathematically clear, understandable, and flexible decision model that can easily be expanded to include more household characteristics, transportation options, or policy factors. The model advances urban economics, migration studies, and housing affordability research by providing a practical analytical tool for assessing residential mobility decisions within financial and behavioral limits.