Residential Location Choice: The Role of a Taste for Similarity

Hua Kiefer

Abstract


This paper examines the importance of social interactions on a household's location decision. The theory argues that individuals' utility will be greater when socially interacting with similar others. The hypothesis that a household desires to find a good community match is tested through the application of a discrete residential location choice model. In addition, this paper also tests Tiebout's hypothesis that households search for a community where their benefits from local public goods will exceed their local tax costs. The findings tend to support both hypotheses, indicating that a household prefers neighbors with a similar socio-economic background and somewhat larger houses.


Full Text: PDF DOI: 10.5539/ijef.v4n9p34

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This work is licensed under a Creative Commons Attribution 3.0 License.

International Journal of Economics and Finance  ISSN  1916-971X (Print) ISSN  1916-9728 (Online)

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