Microsimulation of Residential Land Development and Household Location Choices

Abstract

Microeconomic theory and disaggregate spatial data are applied to pursue market equilibrium of single-family residential development. Mixed logit models and notions of price competition are used to simulate household location choices for three different household segments, assuming job sites of household members are known. Consistent with bid–rent theory, housing market equilibrium was reached in an iterative fashion. The spatial allocation of new households in the Austin, Texas, region illustrates the potential shape of things to come, with endogenously determined home prices and demographic distributions, based on job access. As expected, positive spatial autocorrelation in home prices and household distributions is observed.