The impact of "Metro C" in Rome on the housing market

An increase in land values is often considered the touchstone of the positive impact of the development of new public transport infrastructure on well-being in cities. In this paper, we evaluate the impact of the construction of "Metro C" – Rome's third metro line – on the housing market and on local economic activity. To overcome the potential threat posed by the non-random placement of transport infrastructure, we rely on the multiple synthetic control method approach. We detect a negative and statistically significant impact of the new infrastructure on average house prices in the treated areas located in the suburbs, reaching minus 137 EUR per square metre three years after the treatment, roughly equal to 5% of the pre-treatment level, driven by properties belonging to the higher end of the price distribution. We also find that the share of foreign-born population in the treated areas displayed a statistically significant increase post-treatment. According to the evidence available, the metro might have thus been perceived as an amenity by poorer households and as a disamenity by richer ones. Such disamenity, in turn, can either be a first-order effect of the development of the new metro line (e.g., due to noise or to diminished safety) or a second-order one, via the inflow of foreign-born population.