Labour supply and commuting time: An empirical study

We estimate a simple labour supply model that incorporates commuting time in a utility maximizing framework. Housing prices are assumed to vary with commuting time, and the elasticity of housing prices with respect to the latter is estimated to be about 10 percent. Using this elasticity estimate the price of commuting time averaged over all individuals is $3.22 while the wage rate is $4.72; thus commuting time is implicitly valued at about two-thirds of the wage rate on average. As far as work hours are concerned, almost all individuals are on the backward bending part of their labour supply curve.