Gas Price Variations and Urban Sprawl: An Empirical Analysis of the Twelve Largest Canadian Metropolitan Areas

We conduct a multivariate analysis of the potential impact of higher gas prices on urban sprawl in the twelve largest Canadian Metropolitan Areas for the period 1986–2006. Controlling for variables such as income and population, we show that higher gasoline prices have significantly reduced urban sprawl. On average, a 1% increase in gas prices has caused a 0.32% increase in the population living in the inner city and a 0.60% decrease in low-density housing units. Our results also show that higher incomes have played a significant role in increasing urban sprawl.