The Impact of Traffic Congestion on Household Behavior: Three Essays on the Role of Heterogeneity

Abstract

Congestion is increasing everywhere from established urban areas to growth centers. The rate of increase is greater in these rapidly growing areas of the country. With the explosion of congestion in rapidly growing areas, how does congestion influence individual decision making? The purpose of this thesis is to investigate how congestion affects people's choices. More specifically, this research considers the role of observable household attributes as conditioning factors, influencing behavioral responses to congestion. This analysis is developed through three separate essays. The first essay focuses on commuting time as the outcome of joint residential and employment decisions. The framework hypothesizes that information about individual preferences for avoiding commuting time can be revealed through the differences in spatial distributions of commuting time. Two different choice margins are selected for the next two essays: a long term margin which would be associated with residential location decisions; and short term choice margins within the context of a random utility model for non-working trips. The second essay hypothesizes that expected congestion is sufficiently important to be displayed in one of a household's most important decisions, the selection of residential location. The effect of congestion can be captured with a hedonic price framework assuming that households select residential locations based on an expected mix of trips. The focus of the third essay changes to individual trips. That is, it hypothesizes household constraints will influence an individual's sensitivity to congestion as displayed through the members' decisions to make individual trips. This process is modeled using a random utility framework with careful attention to the transformation of a trip into a choice. This research provides evidence that household characteristics influence both long and short term decisions. There is support for the hypothesis that there are some household circumstances that limit the members' abilities to respond to congestion. The multiple time constraints on the activities that need to undertaken, and the discretion in when they can be undertaken in relation to other commitments, limit each individual's ability to adapt to congestion. Furthermore, this study recognizes that household circumstances are also important factors driving the distribution of commuting times.