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A spatial Difference-in-Differences estimator to evaluate the effect of change in public mass transit systems on house prices

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  • Dubé, Jean
  • Legros, Diègo
  • Thériault, Marius
  • Des Rosiers, François

Abstract

Evaluating the impact of public mass transit systems on real-estate values is an important application of the hedonic price model (HPM). Recently, a mathematical transformation of this approach has been proposed to account for the potential omission of latent spatial variables that may overestimate the impact of accessibility to mass transit systems on values. The development of a Difference-in-Differences (DID) estimator, based on the repeat-sales approach, is a move in the right direction. However, such an estimator neglects the possibility that specification of the price equation may follow a spatial autoregressive process with respect to the dependent variable. The objective of this paper is to propose a spatial Difference-in-Differences (SDID) estimator accounting for possible spatial spillover effects. Particular emphasis is placed on the development of a suitable weights matrix accounting for spatial links between observations. Finally, an empirical application of the SDID estimator based on the development of a new commuter rail transit system for the suburban agglomeration of Montréal (Canada) is presented and compared to the usual DID estimator.

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  • Dubé, Jean & Legros, Diègo & Thériault, Marius & Des Rosiers, François, 2014. "A spatial Difference-in-Differences estimator to evaluate the effect of change in public mass transit systems on house prices," Transportation Research Part B: Methodological, Elsevier, vol. 64(C), pages 24-40.
  • Handle: RePEc:eee:transb:v:64:y:2014:i:c:p:24-40
    DOI: 10.1016/j.trb.2014.02.007
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    Cited by:

    1. Thanos, Sotirios & Dubé, Jean & Legros, Diègo, 2016. "Putting time into space: the temporal coherence of spatial applications in the housing market," Regional Science and Urban Economics, Elsevier, vol. 58(C), pages 78-88.
    2. Andre Chagas & Carlos Azzoni & Alexandre Almeida, 2015. "A Spatial Difference-in-Difference Analysis to Measure the Sugarcane Producing Impact in Respiratory Health," ERSA conference papers ersa15p511, European Regional Science Association.
    3. Elham Erfanian & Alan R. Collins & Daniel Grossmam, 2018. "The Impact of Naloxone Access Laws on Opioid Overdose Deaths in the U.S," Working Papers Working Paper 2018-03, Regional Research Institute, West Virginia University.
    4. repec:eee:regeco:v:67:y:2017:i:c:p:64-77 is not listed on IDEAS
    5. Sunak, Yasin & Madlener, Reinhard, 2016. "The impact of wind farm visibility on property values: A spatial difference-in-differences analysis," Energy Economics, Elsevier, vol. 55(C), pages 79-91.
    6. repec:eee:regeco:v:68:y:2018:i:c:p:36-45 is not listed on IDEAS
    7. repec:eee:transa:v:110:y:2018:i:c:p:73-87 is not listed on IDEAS
    8. Chagas, André L.S. & Azzoni, Carlos R. & Almeida, Alexandre N., 2016. "A spatial difference-in-differences analysis of the impact of sugarcane production on respiratory diseases," Regional Science and Urban Economics, Elsevier, vol. 59(C), pages 24-36.

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