USC Lusk Center Seminar featuring Edward Coulson, UC Irvine
USC Lusk Center for Real Estate Research Seminar Series
University of California, Irvine
Abstract: We present a theoretical model of municipal rents to develop testable hypotheses about the potential capitalization of commuting costs from a gasoline tax on home values across a city. Using 908,205 home sales in Clark County, Nevada from years 1980-2010, we find that: all else equal, homes with longer commutes sell at lower prices; homes with short commutes exhibit price changes of the same sign as a change in gasoline prices, and distant homes exhibit price changes opposite in sign to that of the gas price change; and relative home values respond asymmetrically to increases and decreases in gasoline prices. A ten percent increase in gasoline prices is associated with changes in location-specific average home values that span a range of about $12,700. This suggests that an increase in gasoline taxes or a carbon tax could affect household wealth and housing markets across different locations in a metropolitan area.
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