Oil Prices and Urban Housing Demand

William Larson and Weihua Zhao ()
Additional contact information
Weihua Zhao: University of Lousiville

No 16-03, FHFA Staff Working Papers from Federal Housing Finance Agency

Abstract: We develop a model of a monocentric, oil-exporting city. The model predicts a "twist" (rotation combined with a level shift) of the house price gradient with an oil price change due to the combined producer price and transportation cost effects. Using ZIP code level house price indices between 1975 and 2015, we show the slope of the house price gradient steepens in all cities when the price of oil is high and flattens when the price of oil is low. Areas specialized in oil and gas-related industries have house price changes that are positively linked with the price of oil. These results are consistent with theoretical predictions, and they quantify the large and differential risks to house prices associated with oil price changes both within and across all cities.

Keywords: transportation cost; gasoline price; industrial specialization; input-output model; economic base model (search for similar items in EconPapers)
JEL-codes: Q4 R30 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2016-09
New Economics Papers: this item is included in nep-ene and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Related works:
Journal Article: Oil Prices and Urban Housing Demand (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:hfa:wpaper:16-03

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