Microeconomic model of residential location incorporating life cycle and social expectations
The proposed model captures the dynamics of residential location choices based on the microeconomic urban theory. Household behavior includes life cycle expectations, which is anticipated by imitation to other households. Imitation bid function depend on the expected income along with the current and expected household attributes. A multinomial logit model is assumed to calculate the location equilibrium. Numerical simulations with linear bid functions are proposed to explain the dynamics of residential segregation.
residential location imitation bid functions multinomial logit equilibrium residential segregation social learning household life cycle