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Examining the impact of high-speed railways on land value and government revenue: Evidence from China

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  • Li, Shaoshuai
  • Li, Zhigang
  • Yuan, Jia

Abstract

The Beijing-Shanghai high-speed railway operates at 300 km per hour to connect two of the most important Chinese cities within a travel time of 5 h. By exploiting a unique government land sale dataset, this paper investigates the impact of this high-speed railway on land price and then on the local government revenue. We show that the BSH generally increases the land price by about 87%, which amounts to about RMB 99 billion (around USD 14 billion) more in government land sale revenue or helps to cover about 45% of its construction cost. Furthermore, we show the heterogeneity of the impacts of the BSH on the prices of different types of land. Specifically, we find that residential land located within 3 km from a BSH station experiences a price increase of 278%. This effect is weaker for mixed-use land. Our finding shows that high-speed railway itself could serve as a key channel of infrastructure financing and government revenue sources.

Suggested Citation

  • Li, Shaoshuai & Li, Zhigang & Yuan, Jia, 2020. "Examining the impact of high-speed railways on land value and government revenue: Evidence from China," China Economic Review, Elsevier, vol. 63(C).
    • Handle: RePEc:eee:chieco:v:63:y:2020:i:c:s1043951x20300997
    DOI: 10.1016/j.chieco.2020.101502
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    Cited by:

    1. Yuan, Hang & Guan, Zhihua & Jiang, Changmin & Yang, Hangjun, 2023. "Peer effect in the construction of China’s high-speed rail stations: Empirical evidence from spatial econometric analysis," Transportation Research Part A: Policy and Practice, Elsevier, vol. 173(C).
    2. Tianshu Li & Zhigang Chen, 2022. "The impact of transportation development on land price differences between cities: Widening or narrowing?—A case study based on the provincial level of Mainland China," Growth and Change, Wiley Blackwell, vol. 53(2), pages 910-932, June.

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    More about this item

    Keywords

    High-speed railway; Transportation infrastructure; Land value; Government revenue;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • L91 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Transportation: General
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment

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