The Hindu Business Line : Suburban living

I recently met a real-estate developer who mentioned that people are increasingly moving to the suburbs. He believes that this movement will lead to better lifestyle because suburban prices are cheaper and the air, less polluting. But the move to a suburb is not an easy economic decision. Why?

Suppose you have a choice between buying a small apartment for Rs 50 lakh within the city and building a large house for the same price in the suburb. Which would you prefer?

If you behave like most of us do, you will choose the large house in the suburb. Commuting to work every day through the thick traffic is a small price to pay for luxurious living. Or so you think.

But it turns out that moving through the traffic can be tiring. That is because the traffic is unpredictable. Ironic as it may seem, if you face traffic jams every day, your mind will train itself to accept the wasted hours on the road.

Commuting paradox

Unfortunately or fortunately (I am not sure which one), we do not always get caught in a gridlock. And that means we never really adapt to the suffering of watching the road turn into a giant parking lot. This leads to what economists call as the commuting paradox.

Several years ago, two economists from the University of Zurich conducted a study to find whether people in Germany were happier living in large suburban houses but with additional commuting hours. Their conclusion is startling.

They found that we need to earn 40 per cent more to be happy if we have to travel an hour each way than if we are within walking distance of our workplace!

And that is not all. Social scientists have argued that commuting results in less social connections. The logic appears to be that every 10 minutes of commuting time leads to 10 per cent fewer social connections unless, of course, you take the public transport. Given all this, is the economic decision to move to a suburb so easy?

(The author is an investment strategist. blfeedback@thehindu.co.in)

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