The Effect of Gasoline Prices on Household Location

Raven Molloy and Hui Shan
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Raven Molloy: Federal Reserve Board

The Review of Economics and Statistics, 2013, vol. 95, issue 4, 1212-1221

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 postal codes and municipalities from 1981 to 2008, we find that a 10% increase in gas prices leads to a 10% 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 prevents the change in housing demand from capitalizing in house prices. No rights reserved. This work was authored as part of the Contributor's official duties as an Employee of the United States Government and is therefore a work of the United States Government. In accordance with 17 U.S.C. 105, no copyright protection is available for such works under U.S. law

Keywords: gasoline prices; household location; housing demand; commuting; housing supply (search for similar items in EconPapers)
JEL-codes: Q31 R21 R23 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (22)

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Working Paper: The effect of gasoline prices on household location (2010)
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