Preferences for Housing, Jobs, and Commuting: A Mixed Logit Analysis

This paper reports stated preferences of Dutch workers for combinations of housing, employment, and commuting. The analysis uses standard logit models as well as mixed logit models. Estimation results offer insights into the relative importance of various aspects of housing, employment, and commuting. Households dislike commuting and the value of commuting time implied by the model is high in comparison to the wage rate. Nevertheless, preferences for some housing attributes are strong enough to make substantially longer commuting acceptable to most workers. Of special interest is the strong preference for living in small‐or medium‐size cities, especially among two income households. Using a mixed logit model instead of a standard logit model results in a substantial improvement of the loglikelihood, reflecting the importance of heterogeneity among respondents. If no individual characteristics are incorporated into the model, the mixed logit implies substantially lower average monetary evaluations of most attributes. These differences are much smaller if some individual characteristics are incorporated into the model.