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Accueil > Equipe > Anciens du CIRED > François Gusdorf > Papers

Behaviors and housing inertia are key factors in determining the consequences of a shock in transportation costs

Gusdorf F., Hallegatte S., 2007. Energy Policy, june, 35 (6), pp. 3483-3495.

publié le , mis à jour le

This paper investigates the consequences of a sudden increase in transportation
costs when households behaviors and buildings inertia are accounted for. A theoretical
framework is proposed, capturing the interactions between behaviors, transportation
costs and urban structure. Numerical simulations show that changes in
households and landowners’ choices reduce significantly the long-term adverse effects
of a shock in transportation costs. Indeed, the shock translates, over the long-run,
into a more concentrated housing that limits households utility losses and maintains
landowners’ income. But, because of buildings inertia, the shock leads first
to a long transition, during which the adjustment is constrained by a suboptimal
housing-supply structure. Then, households support larger losses than in the final
stage, though lower than with no behavior adjustment, and landowners experience a
large decrease in their aggregate income and an important redistribution of wealth.
Thus, behaviors and buildings inertia are key factors in determining the vulnerability
to transportation price variability and to the introduction of climate policies.
Our policy conclusions are that : (i) if a long-term increase in transportation costs
is unavoidable because of climate change or resource scarcity, a smooth change prevents
to some extent the negative transition effects ; and (ii) fast-growing cities of the
developing world can reduce their future vulnerability to shocks in transportation
costs through the implementation of policies that limit urban sprawl.