Driving My Life Away? Essays examining the impact of commuting on income and well-being

Commuting is an important and increasing component of time use. In 1995/97, the average worker in Britain commuted for 48 minutes per day; by 2012 this had increased to 56 minutes, c. 12% of a standard fulltime working week (Department of Transport National Travel Survey (NTS), 2013). Since commuting is viewed as an economic bad, rational individuals should only undertake longer commutes if they are compensated for doing so. This compensation can be monetary (e.g. higher pay) and non-monetary (e.g. better housing). Because of this compensation, people with longer commutes should not report lower levels of subjective well-being (SWB) - a proxy for utility - than people with shorter commutes. The principle aim of this thesis is to examine commuting behaviour against a number of different outcomes. Chapter 2 uses data from the Annual Survey of Hours and Earnings (ASHE) to investigate the causal relationship between commuting distance and pay. Specifically, we focus on exogenous shocks to commuting, similar to the papers by Mulalic et al (2010, 2013). We find evidence of a positive and significant relationship between commuting distance and income, suggesting that individuals receive financial compensation for longer commutes. Chapter 3 considers commuting and social capital, specifically in the presence of congestion charging. Using unique data, we analyse the impact that the Western Extension Zone (WEZ) had on an individual's stock of social capital. Following Putnam (2000), we proxy social capital by the frequency of visiting friends and family. Using difference-in-difference (D-i-D) techniques, we find that the WEZ did lead to lower levels of social capital. Chapters 4 and 5 then look at the relationship between commuting and well-being using data from the British Household Panel Survey. In chapter 4 we show that there is an insignificant relationship between commuting time and life satisfaction for individuals, albeit there is a relationship between the General Health Questionnaire (GHQ) score and commuting for women. In chapter 5, we then consider the couple as the unit of analysis. Again we find no evidence of a negative relationship between commuting time and SWB. This is robust to including spousal commuting information. We conclude that commuting further increases individuals' pay. However, we find no evidence of a significant relationship between commuting and SWB, which is a broader measure of individual utility. This may be due to commuting being associated with lower levels of social capital, which cancels out the effect of income on well-being.