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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:2010/9/doc2010-28
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    File URL: http://ieb.ub.edu/aplicacio/fitxers/2010/9/Doc2010-28.pdf
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    Cited by:

    1. William D. Larson & Weihua Zhao, 2016. "Oil Prices and Urban Housing Demand," FHFA Staff Working Papers 16-03, Federal Housing Finance Agency.
    2. 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.
    3. repec:eee:retrec:v:60:y:2016:i:c:p:25-34 is not listed on IDEAS
    4. David Genesove & Lu Han, 2012. "A Spatial Look at Housing Boom and Bust Cycles," NBER Chapters,in: Housing and the Financial Crisis, pages 105-141 National Bureau of Economic Research, Inc.
    5. Fesselmeyer, Eric & Liu, Haoming, 2016. "How Do Users Value a Network Expansion? Evidence from the Public Transit System in Singapore," IZA Discussion Papers 10142, Institute for the Study of Labor (IZA).
    6. 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.
    7. Hymel, Kent M. & Small, Kenneth A., 2015. "The rebound effect for automobile travel: Asymmetric response to price changes and novel features of the 2000s," Energy Economics, Elsevier, vol. 49(C), pages 93-103.
    8. repec:eee:regeco:v:68:y:2018:i:c:p:160-171 is not listed on IDEAS
    9. Michael J. Boehm, 2013. "Concentration Versus Re-Matching? Evidence About the Locational Effects of Commuting Costs," CEP Discussion Papers dp1207, Centre for Economic Performance, LSE.
    10. Kent M. Hymel & Kenneth Small, 2014. "The Rebound Effect for Automobile Travel:Asymmetric Response to Price Changes and Novel Features of the 2000s," Working Papers 141503, University of California-Irvine, Department of Economics.

    More about this item

    Keywords

    Gasoline price; household location; housing; commuting;

    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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