Suburbanization and car-ownership have increased rapidly in developing-world cities over the past half-century. This study examines the relationship between income, car ownership, and suburbanization across geographies and households in metropolitan Mexico City. Neither car-ownership trends by geography nor a mixed logit model of 43,000 households’ joint car-ownership and residential-location decisions suggest that car ownership and suburbanization are moving hand-in-hand. Instead, wealthier households tend to live in central locations and own and drive cars, while poorer households tend to live further from the urban center and rely more heavily on transit. If a random household’s income doubles, that household is around 44% more likely to get an additional car and 29% more likely to live in the urban center. Given the sticky nature of housing supply and the current model of peripheral housing production, aggregate responses to higher income are more difficult to predict, as they will almost certainly be offset by higher prices. Nevertheless, the findings suggest that higher income and car ownership do not tend to encourage a move to larger houses on larger suburban lots in Mexico City.
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