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

Ahlfeldt, Gabriel M. (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


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
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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 Jul 2021 00:57

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