Some applications of welfare maximization approaches to residential location

Abstract

Two optimization models for residential location in an urban area are presented. In both models the trade-off between the local residential density and the access to workplaces is fundamental. In the first model a social welfare function is considered that can be interpreted as the aggregated expected utility received by the individuals. In the second model the welfare function is expressed in terms of two planning indicators. The models are applied to the Stockholm region in an empirical comparison. In particular, a study is made of how various preferences concerning residential density and travel time affect the optimal housing distribution.