Substitution between working at home and out-of-home: The role of ICT and commuting costs

This paper analyzes the trade-off between working at home and out-of-home, ICT and commuting time. To this end, we develop a microeconomic demand system, which explicitly incorporates both time and income constraints. Commuting time is considered as the price to be paid for working out-of-home and a...

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Veröffentlicht in:Transportation research. Part A, Policy and practice Policy and practice, 2007-02, Vol.41 (2), p.142-160
Hauptverfasser: de Graaff, Thomas, Rietveld, Piet
Format: Artikel
Sprache:eng
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Zusammenfassung:This paper analyzes the trade-off between working at home and out-of-home, ICT and commuting time. To this end, we develop a microeconomic demand system, which explicitly incorporates both time and income constraints. Commuting time is considered as the price to be paid for working out-of-home and a decrease in earnings as the price for working at home. For the latter, we find that working at home leads to a (marginally significant) reduction of the wage rate of about 19%, but this gap largely disappears when ICT is used for at home work. To examine the relation between out-of-home and at home work empirically, we estimate a translog indirect utility function, from which we are able to estimate substitution and price elasticities between working at home and out-of-home for The Netherlands. The results show that changes in ICT and commuting time display rather weak substitution effects on working out-of-home and at home, respectively. Moreover, individual characteristics – especially age and education – seem to be more important for the choice between working at home and out-of-home than ICT availability or commuting time.
ISSN:0965-8564
1879-2375
DOI:10.1016/j.tra.2006.02.005