Working Papers

Commute Mode and Residential Location Choice

Abstract: Public transportation infrastructure projects are major government investments that affect not only individuals' travel mode choices, but also residential locations in the long-term. To analyze the impacts of public transportation projects, accounting for the effect on households' residential location decisions, I develop a discrete choice model of commute mode and residential location, in which households have heterogeneous preferences for neighbourhood characteristics and commute costs. I estimate this model using microdata from Vancouver and commute times calculated with geographic information system (GIS) data. The preference estimates imply the opportunity cost of time spent commuting, or value of travel time savings, is 15.26 dollars per hour for the mean-income household; there is significant heterogeneity in this value across household income. Using the estimated model, I simulate households' residential and commute mode decisions under a proposed public transportation infrastructure project and analyze the change in public transportation use, income segregation, consumer surplus, and travel time savings.

Housing Price Network Effects from Public Transit Investment: Evidence from Vancouver (with Alex W. Chernoff)

Abstract: In this paper, we estimate the effect on housing prices of the expansion of the Vancouver SkyTrain rapid transit network during the period 2001–11. We extend the canonical residential sorting equilibrium framework to include commuting time in the household utility function. We estimate household preferences in the sorting model using confidential micro data and geographic information systems (GIS) data on the SkyTrain network. Using these preference estimates and observed data for 2001, we simulate the equilibrium effects of expanding the SkyTrain. In our counterfactual analysis, the SkyTrain expansion increases housing prices not only in neighborhoods where the expansion occurred, but also in those with access to pre-existing segments of the network. We show how these network housing price effects depend on household commuting patterns, and discuss the implications of our results for targeted taxation policies designed to capture the housing price appreciation stemming from a public transit investment.


Academia or the Private Sector? Sorting of Agents into Institutions and an Outside Sector (with Marie-Louise Vierø)

The B.E. Journal of Theoretical Economics (Contributions) 13, 303-345, 2013. (working paper version)

Abstract: This article develops an equilibrium sorting model with utility maximizing agents (researchers) on one side of the market, and on the other side institutions (universities) and an outside sector. Researchers are assumed to care about peer effects, their relative status within universities, and salary compensation. They differ in their concern for salary compensation as well as in their ability. We derive the unique stable equilibrium allocation of researchers and investigate the effects on the academic sector of changes in the outside option as well as the interaction between the outside option and the researchers’ concern for relative status. In any equilibrium, the right-hand side of the ability distribution is allocated to the academic sector, while the left-hand side of the ability distribution is allocated to the outside sector, with possible overlap between sectors and within the academic sector. The universities’ qualities are determined endogenously, and we show that an increase in the value of the outside option decreases the difference in quality between the higher and lower ranked universities. Furthermore, differences in average salaries between the institutions arise endogenously.