Stress that Doesn’t Pay: The Commuting Paradox
BibTeX
@article{stutzer2008stress,
title={Stress that doesn't pay: The commuting paradox},
author={Stutzer, Alois and Frey, Bruno S},
journal={Scandinavian Journal of Economics},
volume={110},
number={2},
pages={339--366},
year={2008},
publisher={Wiley Online Library}
}
Abstract
People spend a lot of time commuting and often find it a burden. According to standard economics, the burden of commuting is chosen when compensated either on the labor or on the housing market so that individuals’ utility is equalized. However, in a direct test of this strong notion of equilibrium with panel data, we find that people with longer commuting time report systematically lower subjective well-being. This result is robust with regard to a number of alternative explanations. We mention several possibilities of an extended model of human behavior able to explain this “commuting paradox”.
My Notes
Proposed Explanations:
- Utility is equalized across households. Long commutes reflect benefits to the person’s spouse. (But in their data it doesn’t seem like commuting has a positive effect on partner happiness. And finding still seems to hold in single-person households.)
- Commuting is on people’s minds when they are asked the happiness question. The commuting compensates them with more happiness which they just aren’t thinking about at the time. (But long commuters don’t report more happiness with their homes, and seem less happy with their jobs, health, and spare time.)
- Transaction costs prevent adjustment. The cost of moving house traps people in suboptimal commuting situations. (But people who change their job or residence also report lower happiness if they commute.) (And people from low income households don’t commute more?)
- Behavioral Economics. People
- Are bad at predicting how much commuting will effect their happiness
- hedonically adapt to increased income
- procrastinate on improving the circumstances
My thoughts: might this be an intertemporal trade-off? Commute today, save more money, better off in retirement?
Edit: Or, in regards to the first explanation: Of course people don’t commute to make their spouse happy. They do it to provide a better environment to their kids! How could this be tested? Is commuting more common among parents with children? Long distance commuting etc. (They do control for number of kids in the house though.)
Commuting data
Average daily commuting time in US is 48.8 minutes. See Figure 1. (This is higher than what I got looking at ATUS. They use the Census American Community Survey)
Fig. 1. Average daily commuting time in Europe and the US Data sources: Data for European countries are from the European Survey on Working Conditions, conducted by the European Foundation for the Improvement of Living and Working Conditions in 2000 for member countries and in 2001/02 for acceding and candidate countries. Data for the US are from US Census Bureau, 2002 American Community Survey
Commuting time is captured by the question, “How long does it normally take you to go all the way from your home to your place of work using the most direct route (one way only)?”
Quotations
In an extensive survey, Small (1992, p. 44) concludes that “a reasonable average value of time for the journey to work is 50 percent of the gross wage rate, while recognizing that it varies among different industrialized cities from perhaps 20 to 100 percent of the gross wage rate, and among population subgroups by even more”.
Compared to the effect of becoming unemployed (= −0.671), as reported in Stutzer and Frey (2004, Table 4), an increase in commuting time by one standard deviation (one hour) is about one-eighth (one-fourth) as bad for life satisfaction.