Interdependences between current choices and future expectations in the context of Hanoians’ residential location choices

ABSTRACT

Based on the theory of backward-looking and forward-looking behaviour, a residential location choice model is established to represent interdependences between current choices and future expectations (FE). The interdependences might be observed not only with respect to a particular alternative in a choice set (within-alternative interdependences), but also between different alternatives (between-alternative interdependences), which are jointly incorporated by using a paired combinatorial logit model. Analysis results using data collected from 13,712 individuals in Hanoi in 2005 confirmed that 26.42–55.28% of the total variance of current residential location choice utility can be explained by FE, while 40.81–99.37% of FE can be captured by current choices (i.e. state dependence). The influence of within-alternative interdependences regarding urban core (UC) residence for low-income individuals is almost double that for medium-to-high-income individuals. For between-alternative interdependences, similar results are observed for both low- and medium-to-high-income groups: it can explain 37.37–58.55% of total variance for suburban residence, but only marginal influence (0.00–0.89%) is confirmed for UC residence. These findings suggest that FE cannot be ignored in the analysis of residential location choice behaviour.

KEYWORDS:

• Future expectations
• interdependence
• state dependence
• residential location choice
• income
• Hanoi

Acknowledgements

Data used in this study were collected by Japan International Cooperation Agency (JICA). The authors are grateful to JICA for their data provision.

Notes

1. Detailed contents of the questionnaire survey can be obtained directly from the first author.