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Stress That Doesn't Pay Off: The Commuting Paradox

42 Pages Posted: 13 Sep 2004  

Alois Stutzer

University of Basel - Faculty of Business and Economics; IZA Institute of Labor Economics

Bruno S. Frey

CREMA; University of Basel

Date Written: September 2004

Abstract

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

Stutzer, Alois and Frey, Bruno S., Stress That Doesn't Pay Off: The Commuting Paradox (September 2004). IZA Discussion Paper No. 1278; Zurich IEER Working Paper No. 151. Available at SSRN: https://ssrn.com/abstract=408220

Alois Stutzer (Contact Author)

University of Basel - Faculty of Business and Economics ( email )

Peter Merian-Weg 6
4002 Basel
Switzerland
0041 61 267 3361 (Phone)
0041 61 267 3340 (Fax)

HOME PAGE: http://www.wwz.unibas.ch/stutzer/

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Bruno S. Frey

CREMA ( email )

Südstrasse 11
Zurich, CH 8008
Switzerland
+41 44 380 00 78 (Phone)

University of Basel ( email )

Peter Merian-Weg 6
Basel, 4002
Switzerland

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