Methodological Issues in the Analysis of Residential Preferences, Residential Mobility, and Neighborhood Change

This paper reviews methods for analyzing both individual preferences and choices about where to live, and the implications of these choices for residential patterns. Although these methods are discussed in the context of residential choice, they can be applied more broadly to individual choices in a range of social contexts where behavior is interdependent. We review a variety of types of data on residential preferences and mobility and discuss appropriate statistical models for these data. We discuss the analysis of ranked and other types of clustered data; functional form issues; problems of unobserved heterogeneity in individuals and in neighborhoods; and strengths and weaknesses of stated preference data versus observations of actual mobility behavior. We also discuss specific problems with residential mobility data, including the treatment of one's current location as a potential choice, how to specify the choice set of potential movers, the aggregation of units (such as dwelling units into neighborhoods) and the need to take account of variations in neighborhood size, the problem of very large choice sets and possible sampling solutions; and the link between residential mobility and patterns of neighborhood change.