The effect of gasoline prices on household location

Raven S. Molloy and Hui Shan
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Raven S. Molloy: https://www.federalreserve.gov/econres/raven-molloy.htm

No 2010-36, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

Abstract: Gasoline prices influence where households decide to locate by changing the cost of commuting. Consequently, the substantial increase in gas prices since 2003 may have reduced the demand for housing in areas far from employment centers, leading to a decrease in the price and/or quantity of housing in those locations relative to locations closer to jobs. Using annual panel data on ZIP codes and municipalities in a large number of metropolitan areas of the United States from 1981 to 2008, we find that a 10 percent increase in gas prices leads to a 10 percent decrease in construction after 4 years in locations with a long average commute relative to locations closer to jobs, but to no significant change in house prices. Thus, the supply response may prevent the change in housing demand from capitalizing in house prices. Because housing is durable, the resulting change in construction has a long-lived impact on the spatial distribution of housing units.

Keywords: Housing - Prices; Gasoline (search for similar items in EconPapers)
Date: 2010
New Economics Papers: this item is included in nep-ene and nep-ure
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Citations: View citations in EconPapers (7)

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Related works:
Journal Article: The Effect of Gasoline Prices on Household Location (2013)
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