Behavioral Housing Search Choice Set Formation: A Hazard-Based Screening Model of Property Value and Work Distance

Residential location search has been an interesting topic to both practitioners and researchers. The housing search process starts with an alternative formation and screening practice. At this level households evaluate all potential alternatives based on their lifestyle, preferences, and utilities to form a manageable choice set with limited number of plausible alternatives. This paper attempts to study this screening and filtering practice in more details and to develop a modeling framework that can replicate this process. The average desired property value and work distance are considered as two potential attributes, among others, which are examined by the household to evaluate feasible housing alternatives. It is postulated that alternatives will be included in the choice set only if the average property value meets the household budget and the work distance satisfies the household distance threshold. The search process will then continue until the choice set is complete. A hazard-based model is formulated that can model the desired property value and average work distance together. Several household socio-demographic attributes from eight waves of the Puget Sound Transportation Panel (PSTP) were utilized for model estimation along with built environment variables, characteristics of the supply side of the market, and several other economic indicators. The approach presented in the paper provides a remedy for the large choice set problem typically faced in discrete choice modeling."