Abstract
The paper examines, through comparative statics, the impact on urban form of changes in the price of energy used for transportation. Two specific models are analyzed within a framework of long-run equilibrium: Model 1 involves households that supply an institutionally fixed number of labor hours, and their choice of residential location is affected by energy costs as the only out-of-pocket transportation cost for the journey to work; and model 2 deals with households that trade off travel time for work time and thus incur a time cost equal to the forgone income from production. The paper shows that in model 1 higher gasoline prices do result in less aggregate demand for gasoline and in less suburbanization of the residential activity. In model 2 higher energy prices do not necessarily result in either less suburbanization or less aggregate demand for gasoline.
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