Persistence of commuting habits: context effects in Germany

Abstract

AbstractIn this study, I investigate the commuting behavior of workers in Germany. Using comprehensive geo-referenced administrative employee and firm data, I can calculate the exact commuting time and the distance between workers’ residence and workplace locations. Based on a behavioral economic approach (Simonson and Tveresky in J Mark Res 29:281–295, 1992), I show that individual commuting decisions are influenced by wages and individual heterogeneity as well as depending on the context individuals observed in the past. In particular, my results show that previously observed commutes have an impact on subsequent commuting behavior: workers choose longer commuting times in the region they recently moved to when the average commute in the region they left was longer. The results indicate that while selectivity and sorting do not influence the effect of the context, the inclusion of individual fixed effects is crucial.