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This study examines the residential self-selection issue from conceptual and methodological aspects, with an empirical application. The study was motivated by the challenge of interpreting the results of an endogenous switching model and the lack of convenient/proper equations for calculating treatment effects when the dependent variable is log-transformed. We classify expected returns from living in a certain kind of area (urban vs. non-urban) into location-related versus transportation-related, and economic versus lifestyle, aspects. From that, we note that the outcome variable of interest to this study among many others—vehicle-miles driven (VMD)—may not correspond to the returns an individual is seeking to optimize when choosing where to live. Previous studies tend to expect negative error correlations between selection and outcome equations, on the presumption that urbanite people would desire to drive …