Transit-oriented development (TOD) is a comprehensive approach to sustainable community and regional planning that integrates critical environmental, economic, and social issues. This study focuses on a fundamental question for end users, that is, travelers: Can TOD, as a planning concept, serve people's needs and expectations as well as translate into tangible savings in expenditures on transportation? The role of TOD as a distinct planning strategy in affecting household transportation costs is specified within a sample selection regression model that controls for residential self-selection bias. With a sample of 6,526 households in the San Francisco, California, Bay Area in 2000, the regression results indicate that TOD has a dominant influence on household transportation costs. However, it makes only a moderately positive contribution to reductions in household expenditures on transportation. The regression results also indicate that the self-selection effect accounts for about 21% of the total influence of TOD.