Housing supply elasticity, gasoline prices, and residential property values

Adele C. Morris, Helen R. Neill and N. Edward Coulson

Journal of Housing Economics, 2020, vol. 48, issue C

Abstract: We revise the standard monocentric city model to incorporate differential assumptions about the elasticity of housing supply in response to changes in transportation costs. We test the implications of the model with data from the Las Vegas metropolitan area and find that housing markets respond roughly the same in the face of increases and decreases in gas prices. Supply elasticity is evidently relatively elastic in response to both expansions and contractions, despite expectations that supply is much more inelastic when markets contract when gas prices increase. Simulating the effect of a 10% increase in gas prices from a carbon tax, we find that homes near the center of town rise on average $532 while homes beyond 5 miles fall on average $1,064. These findings are consistent with negative rent gradient results reported in Coulson and Engle (1987) and Larson and Zhao (2017).

Keywords: Commuting cost; Asymmetrical; Carbon tax; Housing supply elasticity (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1051137719301019
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jhouse:v:48:y:2020:i:c:s1051137719301019

DOI: 10.1016/j.jhe.2020.101669

Access Statistics for this article

Journal of Housing Economics is currently edited by H. O. Pollakowski

More articles in Journal of Housing Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().