Location choice and commuting behavior in cities with decentralized employment

Abstract

This paper explores residential and job location patterns and commuting behavior in a monocentric urban model with decentralized employment. We show that, in some cases, identical households choose different residential rings depending on their workers' job locations. This means that high-income households whose workers work near the central business district (CBD) may choose residential locations near the CBD rather than in the suburbs if their workers have CBD job locations. In this case there will be a nonmonotonic relationship in the city between income level and residential distance from the CBD. Identical workers also are shown to choose different residential locations depending on their job locations. Wage gradients for workers as a function of job location are derived. The model also suggests that the skill composition of a firm's workforce affects its incentive to move to the suburbs. Implications of the model for commuting patterns are explored.