IDEAS home Printed from https://ideas.repec.org/a/eee/regeco/v41y2011i6p525-536.html
   My bibliography  Save this article

Estimating the value of a new transit option

Author

Listed:
  • Billings, Stephen B.

Abstract

The research presented here argues that identifying the impacts of rail transit on property values is not possible without estimates of both price gradients to transit stations as well as overall property value trends in transit neighborhoods. The latter may highlight a number of secondary impacts of rail transit on nuisance elements such as crime and parking as well as targeted public and private investment along rail-transit corridors. In order to estimate neighborhood property values, one must establish relevant control neighborhoods. In the case of Charlotte, North Carolina, the public planning and funding process provides information on proposed light rail-transit (LRT) corridors that were ultimately not selected as the first alignment in Charlotte's light rail transit system in 2000. Estimation incorporates a difference-in-difference estimator across a range of hedonic models. Preferred estimates highlight that LRT provides a neighborhood impact of 4.0% for single-family properties and 11.3% for condominiums sold within 1mile of LRT stations. No neighborhood impacts are realized for commercial properties and estimated price gradients provide insignificant impacts across a number of models. Results suggest that LRT investment may be used more as an economic development tool for specific neighborhoods rather than a transportation amenity in cities like Charlotte, which contain sparser development patterns.

Suggested Citation

  • Billings, Stephen B., 2011. "Estimating the value of a new transit option," Regional Science and Urban Economics, Elsevier, vol. 41(6), pages 525-536.
  • Handle: RePEc:eee:regeco:v:41:y:2011:i:6:p:525-536 DOI: 10.1016/j.regsciurbeco.2011.03.013
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0166046211000500
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Case, Bradford & Quigley, John M, 1991. "The Dynamics of Real Estate Prices," The Review of Economics and Statistics, MIT Press, vol. 73(1), pages 50-58, February.
    2. Goetzmann, William N & Spiegel, Matthew, 1995. "Non-temporal Components of Residential Real Estate Appreciation," The Review of Economics and Statistics, MIT Press, vol. 77(1), pages 199-206, February.
    3. McDonald, John F. & Osuji, Clifford I., 1995. "The effect of anticipated transportation improvement on residential land values," Regional Science and Urban Economics, Elsevier, vol. 25(3), pages 261-278, June.
    4. Daniel P. McMillen & John McDonald, 2004. "Reaction of House Prices to a New Rapid Transit Line: Chicago's Midway Line, 1983-1999," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 32(3), pages 463-486, September.
    5. Case, Karl E & Shiller, Robert J, 1989. "The Efficiency of the Market for Single-Family Homes," American Economic Review, American Economic Association, vol. 79(1), pages 125-137, March.
    6. Ghebreegziabiher Debrezion & Eric Pels & Piet Rietveld, 2007. "The Impact of Railway Stations on Residential and Commercial Property Value: A Meta-analysis," The Journal of Real Estate Finance and Economics, Springer, vol. 35(2), pages 161-180, August.
    7. Clapp, John M & Giaccotto, Carmelo, 1998. "Price Indices Based on the Hedonic Repeat-Sales Method: Application to the Housing Market," The Journal of Real Estate Finance and Economics, Springer, vol. 16(1), pages 5-26, January.
    8. Keith R. Ihlanfeldt, 2003. "Rail Transit and Neighborhood Crime: The Case of Atlanta, Georgia," Southern Economic Journal, Southern Economic Association, vol. 70(2), pages 273-294, October.
    9. Rajeev H. Dehejia & Sadek Wahba, 2002. "Propensity Score-Matching Methods For Nonexperimental Causal Studies," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 151-161, February.
    10. Gibbons, Stephen & Machin, Stephen, 2005. "Valuing rail access using transport innovations," Journal of Urban Economics, Elsevier, vol. 57(1), pages 148-169, January.
    11. John A. Kilpatrick & Ronald C. Throupe & John I. Carruthers & Andrew Krause, 2007. "The Impact of Transit Corridors on Residential Property Values," Journal of Real Estate Research, American Real Estate Society, vol. 29(3), pages 303-320.
    12. Redfearn, Christian L., 2009. "How informative are average effects? Hedonic regression and amenity capitalization in complex urban housing markets," Regional Science and Urban Economics, Elsevier, vol. 39(3), pages 297-306, May.
    13. Cervero, Robert & Landis, John, 1993. "Assessing the impacts of urban rail transit on local real estate markets using quasi-experimental comparisons," Transportation Research Part A: Policy and Practice, Elsevier, vol. 27(1), pages 13-22, January.
    14. Stephen Billings & Thomas Thibodeau, 2011. "Intrametropolitan Decentralization: Is Government Structure Capitalized in Residential Property Values?," The Journal of Real Estate Finance and Economics, Springer, vol. 42(4), pages 416-450, May.
    15. Dean H. Gatzlaff & Marc T. Smith, 1993. "The Impact of the Miami Metrorail on the Value of Residences near Station Locations," Land Economics, University of Wisconsin Press, vol. 69(1), pages 54-66.
    16. R. Carter Hill & J. R. Knight & C. F. Sirmans, 1997. "Estimating Capital Asset Price Indexes," The Review of Economics and Statistics, MIT Press, vol. 79(2), pages 226-233, May.
    17. Halvorsen, Robert & Palmquist, Raymond, 1980. "The Interpretation of Dummy Variables in Semilogarithmic Equations," American Economic Review, American Economic Association, vol. 70(3), pages 474-475, June.
    18. Matthew E. Kahn, 2007. "Gentrification Trends in New Transit-Oriented Communities: Evidence from 14 Cities That Expanded and Built Rail Transit Systems," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 35(2), pages 155-182, June.
    19. Bowes, David R. & Ihlanfeldt, Keith R., 2001. "Identifying the Impacts of Rail Transit Stations on Residential Property Values," Journal of Urban Economics, Elsevier, vol. 50(1), pages 1-25, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zheng, Siqi & Xu, Yangfei & Zhang, Xiaonan & Wang, Rui, 2016. "Transit development, consumer amenities and home values: Evidence from Beijing's subway neighborhoods," Journal of Housing Economics, Elsevier, vol. 33(C), pages 22-33.
    2. Redding, Stephen J. & Turner, Matthew A., 2015. "Transportation Costs and the Spatial Organization of Economic Activity," Handbook of Regional and Urban Economics, Elsevier.
    3. Ana Isabel Moreno-Monroy & Frederico Ramos, 2015. "The impact of public transport expansions on informality: the case of the São Paulo Metropolitan Region," ERSA conference papers ersa15p1551, European Regional Science Association.
    4. Givord, Pauline & Rathelot, Roland & Sillard, Patrick, 2013. "Place-based tax exemptions and displacement effects: An evaluation of the Zones Franches Urbaines program," Regional Science and Urban Economics, Elsevier, vol. 43(1), pages 151-163.
    5. Gonzalez-Navarro, Marco & Turner, Matthew A., 2016. "Subways and urban growth: evidence from earth," LSE Research Online Documents on Economics 66535, London School of Economics and Political Science, LSE Library.
    6. Seungwoo Chin & Matthew E. Kahn & Hyungsik Roger Moon, 2017. "Estimating the Gains from New Rail Transit Investment: A Machine Learning Tree Approach," NBER Working Papers 23326, National Bureau of Economic Research, Inc.
    7. Mulley, Corinne & Tsai, Chi-Hong (Patrick), 2016. "When and how much does new transport infrastructure add to property values? Evidence from the bus rapid transit system in Sydney, Australia," Transport Policy, Elsevier, vol. 51(C), pages 15-23.
    8. Wenjie Wu & Guanpeng Dong & Bing Wang, 2015. "Does Planning Matter? Effects on Land Markets," The Journal of Real Estate Finance and Economics, Springer, vol. 50(2), pages 242-269, February.
    9. Nicolas Gendron-Carrier & Marco Gonzalez-Navarro & Stefano Polloni & Matthew A. Turner, 2018. "Subways and Urban Air Pollution," NBER Working Papers 24183, National Bureau of Economic Research, Inc.
    10. Ossokina, Ioulia V. & Verweij, Gerard, 2015. "Urban traffic externalities: Quasi-experimental evidence from housing prices," Regional Science and Urban Economics, Elsevier, vol. 55(C), pages 1-13.
    11. Miller, Mark V., 2013. "Valuing local collective goods: the case of business improvement districts," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150635, Agricultural and Applied Economics Association.
    12. repec:eee:regeco:v:67:y:2017:i:c:p:64-77 is not listed on IDEAS
    13. Phillips, David C. & Sandler, Danielle, 2015. "Does public transit spread crime? Evidence from temporary rail station closures," Regional Science and Urban Economics, Elsevier, vol. 52(C), pages 13-26.
    14. Gabriel Ahlfeldt & Volker Nitsch & Nicolai Wendland, 2016. "Ease vs. Noise: On the Conflicting Effects of Transportation Infrastructure," CESifo Working Paper Series 6058, CESifo Group Munich.
    15. repec:eee:regeco:v:66:y:2017:i:c:p:74-90 is not listed on IDEAS
    16. Hurst, Needham B. & West, Sarah E., 2014. "Public transit and urban redevelopment: The effect of light rail transit on land use in Minneapolis, Minnesota," Regional Science and Urban Economics, Elsevier, vol. 46(C), pages 57-72.
    17. repec:eee:regeco:v:65:y:2017:i:c:p:25-37 is not listed on IDEAS
    18. Sun, Weizeng & Zheng, Siqi & Wang, Rui, 2015. "The capitalization of subway access in home value: A repeat-rentals model with supply constraints in Beijing," Transportation Research Part A: Policy and Practice, Elsevier, vol. 80(C), pages 104-115.
    19. Zhong, Haotian & Li, Wei, 2016. "Rail transit investment and property values: An old tale retold," Transport Policy, Elsevier, vol. 51(C), pages 33-48.

    More about this item

    Keywords

    Rail transit; Residential property valuation;

    JEL classification:

    • R4 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:regeco:v:41:y:2011:i:6:p:525-536. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/regec .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.