Exploring the role of toll road construction on residential location choice in the Jakarta – Bandung region

This study deals with the influence of the construction of a major toll road on residential location preferences in the Jakarta – Bandung region in Indonesia. A hybrid choice model (HCM) was developed to model the effects of socio-economics, travel characteristics, housing characteristics and latent variables on residential location choice simultaneously. The latent variable (LV) model is composed of satisfaction with current neighbourhood and satisfaction with housing. The discrete choice model (DCM) using a mixed logit model (MLM), excluding the latent variables, was also estimated. The models were based on survey data collected from 1500 respondents. The results show that the addition of latent variables that reflect the satisfaction of individuals with neighbourhood accessibility, dwelling size and affordability, led to a higher probability that low-income individuals will move house. Satisfaction with neighbourhood characteristics is more significant than satisfaction with housing to influence residential location choice. Furthermore, high-income earners were willing to pay higher land taxes to live closer than 5 km to the toll road to capture travel time benefits, whereas people in other income segments preferred to live beyond 10 km from the toll gate where housing costs tend to be low. However, spatial location components were found to have a stronger influence on neighbourhood and housing satisfaction levels than socio-economic characteristics.