The effects of housing preference for an apartment on residential location choice in Seoul: A random bidding land use simulation approach

• I evaluate the impact of apartment preference on residential location choice.
• I build a random utility-based land use simulation model of the Seoul metropolitan area.
• Apartment preference would have contributed to providing more apartment units in the suburbs.
• Apartment preference would have contributed to higher apartment rent premiums in wealthy communities.

This study evaluates the impact of medium- and high-income households’ preference for apartments on residential location choice by constructing a random utility-based land use simulation model of the Seoul metropolitan area. The simulation results imply that apartment preference of medium- and high-income groups would have contributed to providing more apartment units (about 14.2% of total apartment units supplied), more housing units in the suburbs (61,000 more housing units in the suburbs), and higher apartment rent premiums in wealthy communities than the assumed housing market under the counterfactual scenario in terms of housing type, location, and rents.