Testing the Standard Urban Model of Residential Choice: An Implicit Markets Approach
Journal of Urban Economics
Important implications of the standard economic model of urban residential choice have failed dramatically to survive empirical tests in recent studies. These results, however, do not distinguish between failure of the model's behavioral foundations—a trade-off of access to jobs and housing costs—and failure of auxiliary assumptions needed to derive testable hypotheses from the model. From an implicit markets model of the housing market, we derive a test that better isolates the predictive power of access and housing cost as determinants of residential decisions and find substantial improvement in the model's empirical performance compared with other recent work.
Herrin, William E. and Kern, Clifford R., "Testing the Standard Urban Model of Residential Choice: An Implicit Markets Approach" (1992). School of International Studies Faculty Articles. 19.