Friday, October 11, 2013

No paradox here

We are on fairly solid ground when we study revealed preferences. Until the neuroeconomics people make a lot of progress, that may be it. There are many "happiness"surveys and I have no idea how to interpret them. We all have mood swings and making inter-personal comparisons is risky.

I just read "Stress that Doesn't Pay: The Commuting Paradox" (by Alois Stutzer and Bruno Frey; H/T Wendell C). Why a paradox? Because if surveys show that long commutes are judged onerous by commuters, that would contradict the idea of a theoretical equilibrium wherein markets adjust to compensate those who travel further.

But perhaps there is no paradox.  Minimizing the commute is neither realistic nor desirable. The average commute in the U.S. is remarkably stable -- while everything else changes (Anas in Brooks et al.). Most workers and their employers seemingly choose locations that keep the whole thing ("costs of sprawl") in check. Many people actually choose a longer commute because they traded that off against a hundred other things in their lives that matter. They may want to be near a particular school, amenity, spouse's job, etc.

Twenty-five years ago, urban economists wrote about "wasteful commuting."  People took longer trips than a very restrictive model or cities predicted. "Wasteful" was always in quotation marks. Stutzer and Frey have not really discovered a paradox.