Gas Prices Variations and Urban Sprawl: an Empirical Analysis of the 12 Largest Canadian Metropolitan Areas

We conduct a multivariate analysis of the potential impact of higher gas prices on urban sprawl in the 12 largest Canadian Metropolitan Areas for the period 1986-2006. Controlling for variables such as income and population, we show that higher prices of gas have contributed significantly to reduce urban sprawl. On average, a 1% increase in gas prices has caused: i) a 0.32% increase in the population living in the inner city and ii) a 1.28% decrease in low-density housing units. Our results also show that higher incomes have played a significant role in increasing urban sprawl.
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