The Impact of Road Rationing on Housing Demand and Sorting

Posted: 19 Mar 2021 Last revised: 4 Apr 2023

See all articles by Rhiannon Jerch

Rhiannon Jerch

Cornell University - Charles H. Dyson School of Applied Economics and Management

Panle Jia Barwick

Cornell University - Department of Economics

Shanjun Li

Cornell University - School of Applied Economics and Management

Jing Wu

Tsinghua University - Hang Lung Center for Real Estate; Tsinghua University - Department of Construction Management

Date Written: January 14, 2021

Abstract

Canonical urban models postulate transportation cost as a key element in determining urban spatial structure. This paper examines how road rationing policies impact the spatial distribution of households around transit centers using rich micro data on housing transactions and resident demographics in Beijing. We find that Beijing's road rationing policy significantly increased the demand for housing near subway stations. The premium for proximity is stable in the periods prior to the driving restriction, but shifts significantly in the aftermath of the policy. The composition of households living close to subway stations shifts toward slightly wealthier households. Our findings suggest that city-wide road rationing policies can have the unintended consequence of limiting access to public transit for lower income individuals.

Keywords: road rationing, housing markets, urban structure

JEL Classification: R21, R41

Suggested Citation

Jerch, Rhiannon and Barwick, Panle Jia and Li, Shanjun and Wu, Jing, The Impact of Road Rationing on Housing Demand and Sorting (January 14, 2021). Available at SSRN: https://ssrn.com/abstract=3766254 or http://dx.doi.org/10.2139/ssrn.3766254

Rhiannon Jerch (Contact Author)

Cornell University - Charles H. Dyson School of Applied Economics and Management ( email )

Ithaca, NY
United States

Panle Jia Barwick

Cornell University - Department of Economics ( email )

414 Uris Hall
Ithaca, NY 14853-7601
United States

Shanjun Li

Cornell University - School of Applied Economics and Management ( email )

248 Warren Hall
Ithaca, NY 14853
United States

Jing Wu

Tsinghua University - Hang Lung Center for Real Estate ( email )

HeShanHeng Building
Beijing, 100084
China

HOME PAGE: http://thuwujing.net

Tsinghua University - Department of Construction Management ( email )

Heshanheng Building
Tsinghua University
Beijing, 100084
China

HOME PAGE: http://thuwujing.net

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