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The effect of gasoline prices on household location

Author

Listed:
  • Raven Molloy

    (Federal Reserve Board)

  • Hui Shan

    (Federal Reserve Board)

Abstract

By raising commuting costs, an increase in gasoline prices should reduce the demand for housing in areas far from employment centers relative to locations closer to jobs. Using annual panel data on a large number of ZIP codes and municipalities from 1981 to 2008, we find that a 10 percent increase in gas prices leads to a 10 percent decrease in construction in locations with a long average commute relative to other locations, but to no significant change in house prices. Thus, the supply response may prevent the change in housing demand from capitalizing in house prices.

Suggested Citation

  • Raven Molloy & Hui Shan, 2010. "The effect of gasoline prices on household location," Working Papers 2010/28, Institut d'Economia de Barcelona (IEB).
    • Handle: RePEc:ieb:wpaper:doc2010-28
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    References listed on IDEAS

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    Cited by:

    1. Boehm, Michael J., 2013. "Concentration versus re-matching? Evidence about the locational effects of commuting costs," LSE Research Online Documents on Economics 51542, London School of Economics and Political Science, LSE Library.
    2. Mendonça, Rita & Roebeling, Peter & Martins, Filomena & Fidélis, Teresa & Teotónio, Carla & Alves, Henrique & Rocha, João, 2020. "Assessing economic instruments to steer urban residential sprawl, using a hedonic pricing simulation modelling approach," Land Use Policy, Elsevier, vol. 92(C).
    3. Larson, William & Liu, Feng & Yezer, Anthony, 2012. "Energy footprint of the city: Effects of urban land use and transportation policies," Journal of Urban Economics, Elsevier, vol. 72(2), pages 147-159.
    4. Wu, JunJie & Sexton, Steven & Zilberman, David, 2019. "Energy price shocks, household location patterns and housing crises: Theory and implications," Energy Economics, Elsevier, vol. 80(C), pages 691-706.

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    More about this item

    Keywords

    Gasoline price; household location; housing; commuting;
    All these keywords.

    JEL classification:

    • Q31 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Demand and Supply; Prices
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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