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If we build it, will they pay? Predicting property price effects of transport innovations

Ahlfeldt, Gabriel M. ORCID: 0000-0001-5664-3230 (2013) If we build it, will they pay? Predicting property price effects of transport innovations. Environment and Planning A, 45 (8). pp. 1977-1994. ISSN 0308-518X

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Identification Number: 10.1068/a45429

Abstract

In this study I apply a gravity-type labor-market accessibility model to the Greater London Area to investigate house price capitalization effects. The spatial scope of labor-market effects is found to be about 60 minutes. Doubling accessibility increases the utility of an average household by about 12%. I combine the gravity approach with a transport decision model that takes into account the urban rail network architecture, allows for mode switching, and thus accounts for the effective accessibility offered by a station, to predict the property price effects of the 1999 Jubilee Line and DLR extension. A considerable degree of heterogeneity is predicted both in terms of the magnitude as well as the spatial extent of price effects around new stations. A quasi-experimental property price analysis reveals that the model performs well in predicting the effective capitalization effects, suggesting that the approach might be a viable ingredient in transport planning.

Item Type: Article
Official URL: http://www.envplan.com/A.html
Additional Information: © 2013 Pion and its Licensors
Divisions: Geography & Environment
Spatial Economics Research Centre
Subjects: H Social Sciences > HE Transportation and Communications
H Social Sciences > HJ Public Finance
H Social Sciences > HN Social history and conditions. Social problems. Social reform
JEL classification: H - Public Economics > H4 - Publicly Provided Goods > H43 - Project Evaluation; Social Discount Rate
R - Urban, Rural, and Regional Economics > R4 - Transportation Systems > R40 - General
R - Urban, Rural, and Regional Economics > R5 - Regional Government Analysis > R58 - Regional Development Policy
Sets: Departments > Geography and Environment
Research centres and groups > Spatial Economics Research Centre
Date Deposited: 30 Oct 2012 09:32
Last Modified: 20 Sep 2021 02:03
URI: http://eprints.lse.ac.uk/id/eprint/47131

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