Scandinavian Working Papers in Economics
HomeAboutSeriesSubject/JEL codesAdvanced Search
Swedish National Road & Transport Research Institute (VTI) Working Papers, Swedish National Road & Transport Research Institute (VTI)

No 2007:12:
An empirical on-the-job search model with preferences for relative earnings: How high is the value of commuting time?

Gunnar Isacsson () and Jan-Erik Swärdh ()

Abstract: The purpose of this paper is to estimate the average value of commuting time (VoCT) in an empirical on-the-job search model. A large Swedish sample of employee-establishment linked data obtained from administrative registers is used to this end. The sample contains detailed information on the individuals' place of residence and place of work and it is combined with information on travel times and travel distances in the road network. We use two empirical models of the individuals' utility function: a basic model and an augmented model. The latter introduces a set of variables intended to capture the effect of interpersonal comparisons of earnings and commuting times in the individual's utility function and on the estimated VoCT. The basic model suggests the average VoCT to be as high as 232 Swedish kronor (SEK) per hour, which is about two and half times higher than the net hourly wage rate in the sample. If we discard the effect of interpersonal comparisons of earnings and commuting time on job switching, the augmented model instead suggests a value of time of 94 SEK, which is more or less equal to the net hourly wage rate in the sample.

Keywords: Value of commuting time; Revealed preferences; Relative earnings; (follow links to similar papers)

JEL-Codes: C41; C81; J60; R41; (follow links to similar papers)

31 pages, September 20, 2007

Before downloading any of the electronic versions below you should read our statement on copyright.
Download GhostScript for viewing Postscript files and the Acrobat Reader for viewing and printing pdf files.

Full text versions of the paper:

Isacsson_Swardh_VoCT.pdf    PDF-file
Download Statistics

Questions (including download problems) about the papers in this series should be directed to Mats Berggren ()
Report other problems with accessing this service to Sune Karlsson () or Helena Lundin ().

Programing by
Design by Joachim Ekebom

Handle: RePEc:hhs:vtiwps:2007_012 This page was generated on 2014-12-14 19:28:26