Housing Search Trade-Off: Price vs. Commute Time

Scarcity

There is limited time and money and people wish to make the best choice and get the best output.

Change

Housing prices

Gas prices

Job

If the market seems to be changing soon and you believe housing prices could go down, it could be beneficial to wait to buy a house. Similarly, if market prices are rising, you need to make a decision fast.

Gas prices can easily fluctuate and commuting when gas is expensive can cost a lot of money.

It could be possible to get another job like the one you currently have in another company closer to your home.

Is keeping your job worth it, in terms of satisfaction and salary?

Economic Well-Being

If housing prices are too high, and people have trouble commuting a lot, more and more people will start to move out of the city. This will lead to lower quality of life and the economic well-being could go down.

Intervention

To increase economic well-being, the government could step in and help its residents. They could create better public transportation, and help people afford housing.

Choice

Other factors will also play into making a choice such as health, happiness, and a social life.

  1. Live farther from work and commute more to get a house at a cheaper price.
  1. Live closer to work and commute less but buy a house at a higher value.

Efficiency

Efficiency is important when making a choice, as it is important for economic well-being.

By commuting less, you could get more work done, earn more money, and save time. This is an efficient choice.

Interdependance

As you are dependant on several factors when commuting, any change could affect your lifestyle.

You are dependant on gas prices staying at a reasonable price and normal traffic everyday. Any changes in these could make you late for work, or take more money out of your pockets each day.

Sustainability

As we have limited resources and unlimited wants, we need to use our resources in way that takes future generations into account as well.

Commuting long distances on a gas-powered vehicle can be very harmful for the environment. Gas is non-renewable which means it will run out eventually, and also contributes to air pollution.

Equity

Government intervention could help create more fair situations for those who struggle to afford housing.

Better public transportation could allow more people to diversify their job search and meet their needs and wants.