Valuing rail access using transport innovations

Abstract

In this paper we implement a powerful empirical approach than has not previously been applied to rail transport evaluation to ascertain how much consumers value rail access. We study the effects on house prices of a transport innovation that altered the distance to the nearest station for some households, but left others unaffected. The transport innovation we study is the construction of new stations under improvements made to the London Underground and Docklands Light Railway in South East London in the late 1990s. Using the innovation to implement a quasi-experimental approach studying house price changes in affected versus unaffected areas allows us to avoid the biases inherent in cross-sectional valuation work. Our evidence on distance-station effects on prices suggests that rail access is significantly valued by households and that these valuations are sizable as compared to the valuations of other local amenities and services.

Urban renewal after the Berlin Wall: a place-based policy evaluation

“…Ahlfeldt & Maennig, 2010;Autor, Palmer, & Pathak, 2014;Ellen, Schill, Susin, & Schwartz, 2001;Helms, 2012;Ioannides, 2002;Koster & Van Ommeren, 2013;Rossi-Hansberg et al, 2010;Schwartz, Ellen, Voicu, & Schill, 2006), we contribute to a literature that has assessed the impact of various local public policies via capitalization effects (e.g. Ahlfeldt & Kavetsos, 2014;Cellini, Ferreira, & Rothstein, 2010;Dachis, Duranton, & Turner, 2012;Dehring, Depken, & Ward, 2008;Eriksen & Rosenthal, 2010;Gibbons & Machin, 2005;Oates, 1969;Santiago, Galster, & Tatian, 2001) and economic effects of spatially targeted policies more generally (Baum-Snow & Marion, 2009;Boarnet & Bogart, 1996;Busso, Gregory, & Kline, 2013;Freedman, 2012Freedman, , 2014Freedman & Owens, 2011;Gobillon, Magnac, & Selod, 2012;Ham, Swenson, İmrohoroğlu, & Song, 2011;Kline, 2010;Kline & Moretti, 2013, 2014aMurray, 1999;Neumark & Kolko, 2010;Sinai & Waldfogel, 2005). 6 Our analysis also connects to a more general research strand in urban economics that examines the amenity value of cities (e.g.…”

How Does Transportation Affordability Vary Among TODs, TADs, and Other Areas

“…On the relationship between housing location and transportation costs, the literature shows that households in areas with high accessibility to job locations save significantly on transportation (Bajic, 1983;Gibbons and Machin, 2005;and So, Tse and Ganesan, 1997). An Australian study (Dodson and Sipe, 2008) about commuting expenditures with respect to housing location shows that as oil prices rise, suburbanites encounter higher financial risk since they depend on private vehicles for everyday commutes.…”

Looming stations: Valuing transport innovations in historical context

“…Reduced labor market frictions or improved worker efficiency due to reduced commuting effort (Gibbons and Machin, 2005) may further contribute to an increase in economic wealth. Rapid transit networks constituted by metrorail and suburban or commuter railway lines represent the backbone of urban mass transportation in many modern metropolitan areas, particularly in Europe.…”

“…Rapid transit networks constituted by metrorail and suburban or commuter railway lines represent the backbone of urban mass transportation in many modern metropolitan areas, particularly in Europe. The impact of rail transit on property prices has attracted much scholarly attention (Bowes and Ihlanfeldt, 2001;Gatzlaff and Smith, 1993;Gibbons and Machin, 2005;Mcmillen and Mcdonald, 2004).…”

“…We follow an empirical approach that shares the basic ideas with Gibbons and Machin (2005) and reveals the marginal value of reduced distance to the next urban railway station by application of a time-difference estimation strategy. Our analysis however, differs in at least three important aspects.…”