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Railroad Development and Land Value

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  • Coffman, Chad
  • Gregson, Mary Eschelbach

Abstract

Land owners in the rural Midwest experienced significant capital gains during the late 1840s and early 1850s. A primary catalyst of increasing land values was the construction of new railroads. Land in close proximity to new railroads became more valuable because of decreased transportation costs. We use a straightforward model of land price determination to estimate the impact on land values of distance from the railroad. The estimates allow us to infer a lower bound for capital gains attributable to the construction of railroads in Knox County, Illinois, during the 1850s. Knox County landowners reaped capital gains of more than $270,000--9 percent of the value of land. Copyright 1998 by Kluwer Academic Publishers

Suggested Citation

  • Coffman, Chad & Gregson, Mary Eschelbach, 1998. "Railroad Development and Land Value," The Journal of Real Estate Finance and Economics, Springer, vol. 16(2), pages 191-204, March.
  • Handle: RePEc:kap:jrefec:v:16:y:1998:i:2:p:191-204
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    Citations

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    Cited by:

    1. Christopher S. Decker & David T. Flynn, 2004. "The Railroad’s Impact on Land Values in the Upper Great Plains at the Closing of the Frontier," Economic History 0408001, EconWPA.
    2. John Joseph Wallis, 2001. "The Property Tax as a Coordinating Device: Financing Indiana's Mammoth Internal Improvement System, 1835 to 1842," NBER Historical Working Papers 0136, National Bureau of Economic Research, Inc.
    3. Wenjie Wu, 2012. "Does Public Investment Spur the Land Market?: Evidence from Transport Improvement in Beijing," SERC Discussion Papers 0116, Spatial Economics Research Centre, LSE.
    4. Gibbons, Stephen & Machin, Stephen, 2005. "Valuing rail access using transport innovations," Journal of Urban Economics, Elsevier, vol. 57(1), pages 148-169, January.
    5. Michael R. Haines & Robert A. Margo, 2006. "Railroads and Local Economic Development: The United States in the 1850s," NBER Working Papers 12381, National Bureau of Economic Research, Inc.
    6. Joost Buurman, 2001. "A spatial exploratory model of rural land prices," ERSA conference papers ersa01p15, European Regional Science Association.
    7. Katherine White, 2008. "Sending or Receiving Stations? The Dual Influence of Railroads in Early 20th-Century Great Plains Settlement," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 27(1), pages 89-115, February.
    8. Ahlfeldt, Gabriel M., 2012. "Rail mega-projects in the realm of inter- and intra-city accessibility: evidence and outlooks for Berlin," LSE Research Online Documents on Economics 43493, London School of Economics and Political Science, LSE Library.
    9. Gabriel M. Ahlfeldt, 2011. "The Train has Left the Station: Do Markets Value Intracity Access to Intercity Rail Connections?," German Economic Review, Verein für Socialpolitik, vol. 12(3), pages 312-335, August.
    10. Robert A. Margo, 1998. "Labor Market Integration Before the Civil War," NBER Working Papers 6643, National Bureau of Economic Research, Inc.
    11. repec:eee:regeco:v:67:y:2017:i:c:p:64-77 is not listed on IDEAS
    12. 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.

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