Reexamining the Impact of Locations on Leaving the Parental Home and Choosing New Locations: Evidence From a New Joint Choice Model

Abstract

Previous models for leaving the parental home mainly focus on the influence of local factors while overlooking how opportunities and costs associated with living outside the local area influence the decision to leave. To address this gap, this paper develops a new joint model with a two-tier nested logit structure for young people's decisions to remain at home or leave, as well as to choose subsequent residential destinations. This model accounts for young people's trade-offs between various location factors in both their parents’ residences and different alternative destinations based on their Socioeconomic circumstances and family backgrounds. Using data from the Understanding Society, we employ an approximate estimation techinique to estimate this model with sampling of alternatives. The results confirm the effectiveness of the model in quantifying the decision-making process and align closely with migration theory. Specifically, job opportunities in nonlocal areas encourage both graduates and non-graduates to leave home and migrate there, while housing costs pose a barrier for non-graduates but not for graduates. This model can be employed by future studies to enhance investigations into the interaction between locations and home-leaving behaviours, as well as to examine the migration decisions of young people living with their parents.