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66 I N N O VAT I O N S I N T R AV E L D E M A N D M O D E L I N G , V O L U M E 2 respectively. Three VOTT scenarios were designed to was simulated for each of six scenarios: the three sets of examine the impact of how VOTT may affect spatial allo- VOTTs for a study area having either a single employ- cation of residences. The low, medium, and high VOTTs ment center [the central business district (CBD)] or multi- for each of the five household types were assumed to be as ple employment centers (with each of 114 such follows: (a) low VOTTs of $1.40/h, $3.50/h, $5.30/h, centers--housing at least 500 jobs--located within the $9.00/h, and $10.60/h; (b) medium VOTTs of $2.80/h, study area in Year 2000). Figure 2 illustrates the locations $7.00/h, $10.50/h, $18.00/h, and $21.30/h; and (c) high of these employment centers, the CBD, and the locations VOTTs of $5.50/h, $14.00/h, $21.00/h, $36.00/h, and of the 18 shopping centers as well. The new households' $42.50/h, respectively. [The low, medium, and high working members were assumed to be allocated job sites VOTTs were taken to be 25%, 50%, and 100% of according to the scenario (i.e., either all worked at the employed members' wage (assuming one full-time CBD or at sites nearest to their chosen homes). employed person in the first four types of households and In each simulation, the average equilibrium unit price two full-time employed persons in the last type of house- for each (large or subdivided) parcel was computed by hold.)] These households compete for homes that offer averaging the unit prices of the occupied pieces that were them the highest utilities. Due to this competition, home subdivided from the parcel, and average occupant income prices are bid up until the market reaches equilibrium. was calculated as the average annual income of house- Essentially, individual households are assumed to holds that chose to reside on the parcel. Figure 3 plots the evaluate all new (single-family) residential parcels as a average equilibrium unit price against the distance to the function of their price, size, and site accessibility (in rela- CBD or to the nearest employment center, depending on tion to travel costs, distances to employment centers and the scenario setup. As expected, the resulting plots illumi- shopping malls, or both). When a home is selected as the nated how undeveloped parcels located near employment best choice by more than one household, the imbalance sites enjoyed higher average equilibrium unit prices. When in both competition and supplydemand should increase VOTTs were low, there was no clear relationship between the unit price. Following such price increases, the previ- the average equilibrium unit price and the distance or ous best choice becomes unaffordable or at least less travel time to employment sites. As VOTTs increased, the preferable due to the price increase, and other, relatively more preferred homes may emerge. Through this implicit price mechanism, households withdraw from competi- tion over home sites that are experiencing high demand. Ultimately, the model presumes that land developers sell the home or home site to the highest bidder at the mar- ket equilibrium's highest price. Equilibration Results The market equilibrium for new home buyers (consider- ing 10% of the presently undeveloped land in Austin) was reached in an iterative fashion. The starting home value was assumed to be low, at just $100 per interior (built) square foot (or $25/ft2 of parcel land). Each house- hold was assumed to consider 20 randomly selected alter- native homes or home sites with specific sizes and accessibilities. IID Gumbel error terms were associated with each competing household and its set of considered alternatives. Knowing price and size, households were assumed to choose those offering the highest utilities as defined by the location choice model. Prices rose in steps of $1/ft2 when a home was desired by more than one household. When each household finally was aligned with a single, utility-maximizing home site, each occu- pied house was allocated to the household that tendered the highest bid. At this stage, the housing market (for new buyersmovers) is said to have reached equilibrium. In FIGURE 2 Locations of Austin's employment centers, cen- this way, Austin's single-family residential development tral business district, and shopping centers.