Understanding differences in residential location preferences between ownership and renting: a case study of London

This study aims to investigate the similarities and differences between residential location choices of owners and renters. The models are estimated for commuter households living in owned or privately rented dwellings in the Greater London Area. The London Household Survey Data, Ward Atlas Data and the London Transport Studies Model outputs are used in this regard. Model parameters are estimated using an error components specification of the mixed logit model to capture differences in error variance. Willingness to Pay (WTP) and elasticity analyses are also performed for interpretation of the estimated model parameters and quantifying the differences between the two groups. The results indicate that while some common factors are affecting the choices of owners and renters, there are significant differences in response to several factors such as public transport accessibility (for ‘car-owning’ households) and percentage of detached houses in the area. Accounting for preference heterogeneity between the sub-groups is expected to lead to better planning and investment decisions.