Stress that Doesn't Pay Off: The Commuting Paradox
42 Pages Posted: 13 Sep 2004
Date Written: September 2004
People spend a lot of time commuting and often find it a burden. According to economics, the burden of commuting is chosen when compensated either on the labor or on the housing market so that individuals' utility is equalized. However, in a direct test of this strong notion of equilibrium, we find that people with longer commuting time report systematically lower subjective well-being. Additional empirical analyses do not find institutional explanations of the empirical results that commuters systematically incur losses. We discuss several possibilities of an extended model of human behavior able to explain this 'commuting paradox'.
Keywords: location theory, commuting, compensating variation, subjective well-being
JEL Classification: D12, D61, R41
Suggested Citation: Suggested Citation