Latent lifestyle preferences and household location decisions

Abstract

Lifestyle, indicating preferences towards a particular way of living, is a key driver of the decision of where to live. We employ latent class choice models to represent this behavior, where the latent classes are the lifestyles and the choice model is the choice of residential location. Thus, we simultaneously estimate lifestyle groups and how lifestyle impacts location decisions. Empirical results indicate three latent lifestyle segments: suburban dwellers, urban dwellers, and transit-riders. The suggested lifestyle segments have intriguing policy implications. Lifecycle characteristics are used to predict lifestyle preferences, although there remain significant aspects that cannot be explained by observable variables. © Springer-Verlag 2006.