ABSTRACT
This chapter presents some empirical evidence on the manner in which transportation costs influence the household's choice of a residential location. The residential location model deals with the locational choice of a single household. It is assumed that the household's transportation costs increase monotonically with the distance it resides from its workplace. It is assumed that the household is an atomistic competitor in the market for residential space. The quantity of residential space the household will consume depends on the household's income, the price of residential space, and its preference for residential space. The direction of the journey-to-work is from residences in outer rings where location rents are low to workplaces in inner rings; and larger proportions of worktrips are made to nearby rings as the workplace's distance from the central business district increases. The key assumptions about the shape of the location rent surface are obtained from our premises about the determinants of the surface.
