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The effect of gasoline prices on suburban housing values in China

Tong Zhang and Paul Burke

China Economic Review, 2022, vol. 72, issue C

Abstract: By raising road transportation costs, an increase in gasoline prices should be expected to reduce housing demand in locations further from the central business district (CBD) relative to inner-city locations. This study uses a monthly real estate area dataset for 19 large cities in China over 2010–2018 to investigate the impact of gasoline prices on intra-city spatial differentials in housing prices. The findings suggest that higher gasoline prices on average lead to a relative decline in housing prices in outer suburbs, with a 1% increase in gasoline prices on average leading to a 0.004% relative reduction in home values for every additional kilometer from the CBD. The effect is larger in cities that have higher automobile ownership rates and that are less densely populated. The results are consistent with a conclusion that the rise of electric vehicles, autonomous vehicles, and working from home is likely to contribute to a lowering of geographical price differentials within Chinese cities over time.

Keywords: Gasoline price; Housing price; Transportation cost (search for similar items in EconPapers)
JEL-codes: Q41 Q43 R31 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (2)

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DOI: 10.1016/j.chieco.2022.101762

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China Economic Review is currently edited by B.M. Fleisher, K. X. D. Huang, M.E. Lovely, Y. Wen, X. Zhang and X. Zhu

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