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Home > Team > Anciens du CIRED > GUSDORF François > Papers

An empirical analysis of the interactions between transportation prices and housing markets

Gusdorf F., Hallegatte S., Nadaud F., submitted to the Journal of Housing Economics

published on , updated on

Urban transportation costs influence households decisions in the housing market:
rent levels and consumers’ location choices are at least partly determined by accessibility. Local effects are differentiated throughout urban systems, and translate
into aggregate evolutions in housing services consumption that are a priori ambiguous. This paper presents an econometric study that relies on aggregate French
data, ranging from year 1960 until year 2005. The empirical estimates show that
the elasticity of housing services consumption to transportation price is negative:
if transportation costs increase by 10%, the demand for housing services decreases
between 8.4% and 9.5%. This effect is significant, and consistent with theoretical
findings. It should be taken into account in the
design of sustainable urban policies.