The Impact of Road Rationing on Housing Demand and Sorting
Posted: 19 Mar 2021 Last revised: 4 Apr 2023
Date Written: January 14, 2021
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: Suggested Citation