IDEAS home Printed from https://ideas.repec.org/p/fip/fedgfe/2010-36.html
   My bibliography  Save this paper

The effect of gasoline prices on household location

Author

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.

Suggested Citation

  • Raven S. Molloy & Hui Shan, 2010. "The effect of gasoline prices on household location," Finance and Economics Discussion Series 2010-36, Board of Governors of the Federal Reserve System (U.S.).
    • Handle: RePEc:fip:fedgfe:2010-36
    as

    Download full text from publisher

    File URL: http://www.federalreserve.gov/pubs/feds/2010/201036/201036abs.html
    Download Restriction: no
    File URL: http://www.federalreserve.gov/pubs/feds/2010/201036/201036pap.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zhang, Tong & Burke, Paul J., 2022. "The effect of gasoline prices on suburban housing values in China," China Economic Review, Elsevier, vol. 72(C).
    2. Stéphane Gauthier & Fanny Henriet, 2018. "A Fuel Tax Decomposition When Local Pollution Matters," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01826330, HAL.
    3. Stéphane Gauthier & Fanny Henriet, 2018. "A Fuel Tax Decomposition When Local Pollution Matters," Working Papers halshs-01826330, HAL.
    4. William D. Larson & Weihua Zhao, 2020. "Oil Prices and Urban Housing Demand," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 48(3), pages 808-849, September.
    5. Lutz Kilian & Xiaoqing Zhou, 2022. "The Propagation of Regional Shocks in Housing Markets: Evidence from Oil Price Shocks in Canada," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 54(4), pages 953-987, June.
    6. Larson, William & Liu, Feng & Yezer, Anthony, 2012. "Energy footprint of the city: Effects of urban land use and transportation policies," Journal of Urban Economics, Elsevier, vol. 72(2), pages 147-159.
    7. Young, Mischa & Tanguay, Georges A. & Lachapelle, Ugo, 2016. "Transportation costs and urban sprawl in Canadian metropolitan areas," Research in Transportation Economics, Elsevier, vol. 60(C), pages 25-34.
    8. Li, Shanjun & Wang, Binglin & Zhou, Hui, 2024. "Decarbonizing passenger transportation in developing countries: Lessons and perspectives1," Regional Science and Urban Economics, Elsevier, vol. 107(C).
    9. Pang, Jindong & An, Lan & Shen, Shulin, 2023. "Gasoline prices, traffic congestion, and carbon emissions," Resource and Energy Economics, Elsevier, vol. 75(C).
    10. David Genesove & Lu Han, 2012. "A Spatial Look at Housing Boom and Bust Cycles," NBER Chapters, in: Housing and the Financial Crisis, pages 105-141, National Bureau of Economic Research, Inc.
    11. Fesselmeyer, Eric & Liu, Haoming, 2016. "How Do Users Value a Network Expansion? Evidence from the Public Transit System in Singapore," IZA Discussion Papers 10142, Institute of Labor Economics (IZA).
    12. Marrouch, Walid & Mourad, Jana, 2019. "Effect of gasoline prices on car fuel efficiency: Evidence from Lebanon," Energy Policy, Elsevier, vol. 135(C).
    13. Morris, Adele C. & Neill, Helen R. & Coulson, N. Edward, 2020. "Housing supply elasticity, gasoline prices, and residential property values," Journal of Housing Economics, Elsevier, vol. 48(C).
    14. Boehm, Michael J., 2013. "Concentration versus re-matching? Evidence about the locational effects of commuting costs," LSE Research Online Documents on Economics 51542, London School of Economics and Political Science, LSE Library.
    15. Hymel, Kent M. & Small, Kenneth A., 2015. "The rebound effect for automobile travel: Asymmetric response to price changes and novel features of the 2000s," Energy Economics, Elsevier, vol. 49(C), pages 93-103.
    16. Huang, Naqun & Li, Jing & Ross, Amanda, 2018. "The impact of the cost of car ownership on the house price gradient in Singapore," Regional Science and Urban Economics, Elsevier, vol. 68(C), pages 160-171.
    17. Michael J. Boehm, 2013. "Concentration Versus Re-Matching? Evidence About the Locational Effects of Commuting Costs," CEP Discussion Papers dp1207, Centre for Economic Performance, LSE.
    18. Nyakundi M. Michieka & Richard S. Gearhart & Noha A. Razek, 2024. "Oil Price Dynamics and Housing Demand in Oil Producing Counties in the U.S," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 48(2), pages 483-512, June.
    19. Fesselmeyer, Eric & Liu, Haoming, 2018. "How much do users value a network expansion? Evidence from the public transit system in Singapore," Regional Science and Urban Economics, Elsevier, vol. 71(C), pages 46-61.
    20. Lyu, Xueying, 2022. "Car restriction policies and housing markets," Journal of Development Economics, Elsevier, vol. 156(C).
    21. Wu, JunJie & Sexton, Steven & Zilberman, David, 2019. "Energy price shocks, household location patterns and housing crises: Theory and implications," Energy Economics, Elsevier, vol. 80(C), pages 691-706.
    22. Kent M. Hymel & Kenneth Small, 2014. "The Rebound Effect for Automobile Travel:Asymmetric Response to Price Changes and Novel Features of the 2000s," Working Papers 141503, University of California-Irvine, Department of Economics.
    23. Mendonça, Rita & Roebeling, Peter & Martins, Filomena & Fidélis, Teresa & Teotónio, Carla & Alves, Henrique & Rocha, João, 2020. "Assessing economic instruments to steer urban residential sprawl, using a hedonic pricing simulation modelling approach," Land Use Policy, Elsevier, vol. 92(C).
    24. Adam Millard-Ball & Purva Kapshikar, 2024. "How land use patterns keep driving cheap: Geographic support for transportation taxes," Urban Studies, Urban Studies Journal Limited, vol. 61(7), pages 1345-1370, May.

    More about this item

    Keywords

    Housing - Prices; Gasoline;

    JEL classification:

    • Q31 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Demand and Supply; Prices
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedgfe:2010-36. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ryan Wolfslayer ; Keisha Fournillier (email available below). General contact details of provider: https://edirc.repec.org/data/frbgvus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.