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Transportation infrastructure improvement and real estate value: impact of level crossing removal project on housing prices

Author

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  • Jian Liang

    (Deakin University)

  • Kang Mo Koo

    (Deakin University)

  • Chyi Lin Lee

    (University of New South Wales)

Abstract

This paper studies the impact of removing the level crossing, which constitutes traffic hazard to the society, on house prices by conducting a quasi-natural experiment using the Level Crossing Removal Project (LXRP) implemented by the Victoria state government in Australia since 2015. Using a difference-in-differences method, we analyzed the changes in housing prices due to the improvement of transportation infrastructure, gauging the LXRP’s impact on house and unit submarkets separately. We found that the prices for house and unit markets increased significantly after the removal of level crossings, with the value uplift decreasing with distance from the removal site. This paper contributes to the existing literature by adding an empirical study related to the enhancement of infrastructure aiming to improve the traffic safety in the urban context. Unlike previous studies, this study examines the effect of improvement projects for existing infrastructure and provides relevant implications to improve the efficiency of investing public resources in infrastructure improvement.

Suggested Citation

  • Jian Liang & Kang Mo Koo & Chyi Lin Lee, 2021. "Transportation infrastructure improvement and real estate value: impact of level crossing removal project on housing prices," Transportation, Springer, vol. 48(6), pages 2969-3011, December.
    • Handle: RePEc:kap:transp:v:48:y:2021:i:6:d:10.1007_s11116-020-10157-1
    DOI: 10.1007/s11116-020-10157-1
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    Cited by:

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    2. Hanli Chen & Yu Zhang & Ningxin Zhang & Man Zhou & Heping Ding, 2022. "Analysis on the Spatial Effect of Infrastructure Development on the Real Estate Price in the Yangtze River Delta," Sustainability, MDPI, vol. 14(13), pages 1-22, June.
    3. Khammo, Faye, 2023. "The Effect of Housing Costs on Household Transportation," Warwick-Monash Economics Student Papers 44, Warwick Monash Economics Student Papers.
    4. Kaida Chen & Hanliang Lin & Lingyun Liao & Yichen Lu & Yen-Jong Chen & Zehua Lin & Linxi Teng & Aifang Weng & Tianqi Fu, 2022. "Nonlinear Rail Accessibility and Road Spatial Pattern Effects on House Prices," Sustainability, MDPI, vol. 14(8), pages 1-24, April.
    5. Wang, Jianing & Lee, Chyi Lin, 2022. "The value of air quality in housing markets: A comparative study of housing sale and rental markets in China," Energy Policy, Elsevier, vol. 160(C).
    6. Liang, Jian & Alexeev, Sergey, 2023. "Harm reduction or amplification? The adverse impact of a supervised injection room on housing prices," Regional Science and Urban Economics, Elsevier, vol. 98(C).

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    More about this item

    Keywords

    Transportation infrastructure; Level crossing removal project; Real estate market; House price;
    All these keywords.

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • I2 - Health, Education, and Welfare - - Education
    • N3 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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