IDEAS home Printed from https://ideas.repec.org/p/cep/cepdps/dp0611.html
   My bibliography  Save this paper

Valuing Rail Access Using Transport Innovations

Author

Listed:
  • Steve Gibbons
  • Stephen Machin

Abstract

In this paper we implement a powerful empirical approach than has not previously been appliedto rail transport evaluation to ascertain how much consumers value rail access. We study theeffects on house prices of a transport innovation that altered the distance to the nearest station forsome households, but left others unaffected. The transport innovation we study is theconstruction of new stations under improvements made to the London Underground andDocklands Light Railway in South East London in the late 1990s. Using the innovation toimplement a quasi-experimental approach studying house price changes in affected versusunaffected areas allows us to avoid the biases inherent in cross-sectional valuation work. Ourevidence on distance-station effects on prices suggests that rail access is significantly valued byhouseholds and that these valuations are sizable as compared to the valuations of other localamenities and services.

Suggested Citation

  • Steve Gibbons & Stephen Machin, 2004. "Valuing Rail Access Using Transport Innovations," CEP Discussion Papers dp0611, Centre for Economic Performance, LSE.
  • Handle: RePEc:cep:cepdps:dp0611
    as

    Download full text from publisher

    File URL: http://cep.lse.ac.uk/pubs/download/dp0611.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Ciccone, Antonio, 2002. "Agglomeration effects in Europe," European Economic Review, Elsevier, vol. 46(2), pages 213-227, February.
    2. Sandra E. Black, 1999. "Do Better Schools Matter? Parental Valuation of Elementary Education," The Quarterly Journal of Economics, Oxford University Press, vol. 114(2), pages 577-599.
    3. Gramlich, Edward M, 1994. "Infrastructure Investment: A Review Essay," Journal of Economic Literature, American Economic Association, vol. 32(3), pages 1176-1196, September.
    4. Sheppard, Stephen, 1999. "Hedonic analysis of housing markets," Handbook of Regional and Urban Economics, in: P. C. Cheshire & E. S. Mills (ed.), Handbook of Regional and Urban Economics, edition 1, volume 3, chapter 41, pages 1595-1635, Elsevier.
    5. Johannes BrÃcker, 1998. "original: Operational spatial computable general equilibrium modeling," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 32(3), pages 367-387.
    6. Steve Gibbons, 2004. "The Costs of Urban Property Crime," Economic Journal, Royal Economic Society, vol. 114(499), pages 441-463, November.
    7. Javier Asensio, 2002. "Transport Mode Choice by Commuters to Barcelona's CBD," Urban Studies, Urban Studies Journal Limited, vol. 39(10), pages 1881-1895, September.
    8. Ciccone, Antonio & Hall, Robert E, 1996. "Productivity and the Density of Economic Activity," American Economic Review, American Economic Association, vol. 86(1), pages 54-70, March.
    9. Henderson, J. Vernon, 2003. "Marshall's scale economies," Journal of Urban Economics, Elsevier, vol. 53(1), pages 1-28, January.
    10. 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.
    11. Gibbons, Steve & Machin, Stephen, 2003. "Valuing English primary schools," Journal of Urban Economics, Elsevier, vol. 53(2), pages 197-219, March.
    12. 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.
    13. 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.
    14. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    15. 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.
    16. Vladimir Bajic, 1983. "The Effects of a New Subway Line on Housing Prices in Metropolitan Toronto," Urban Studies, Urban Studies Journal Limited, vol. 20(2), pages 147-158, May.
    17. Mackie, P.J. & Jara-Díaz, S. & Fowkes, A.S., 0. "The value of travel time savings in evaluation," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 37(2-3), pages 91-106, April.
    18. Dewees, D. N., 1976. "The effect of a subway on residential property values in Toronto," Journal of Urban Economics, Elsevier, vol. 3(4), pages 357-369, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Vickerman, Roger, 2008. "Transit investment and economic development," Research in Transportation Economics, Elsevier, vol. 23(1), pages 107-115, January.
    2. 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.
    3. Diao, Mi & Leonard, Delon & Sing, Tien Foo, 2017. "Spatial-difference-in-differences models for impact of new mass rapid transit line on private housing values," Regional Science and Urban Economics, Elsevier, vol. 67(C), pages 64-77.
    4. 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.
    5. Ahlfeldt, Gabriel M. & Nitsch, Volker & Wendland, Nicolai, 2019. "Ease vs. noise: Long-run changes in the value of transport (dis)amenities," Journal of Environmental Economics and Management, Elsevier, vol. 98(C).
    6. Stephen Gibbons & Stephen Machin, 2008. "Valuing school quality, better transport, and lower crime: evidence from house prices," Oxford Review of Economic Policy, Oxford University Press, vol. 24(1), pages 99-119, spring.
    7. Gabriel Ahlfeldt & Volker Nitsch & Nicolai Wendland, 2016. "Ease vs. Noise: On the Conflicting Effects of Transportation Infrastructure," CESifo Working Paper Series 6058, CESifo.
    8. Devaux, Nicolas & Dubé, Jean & Apparicio, Philippe, 2017. "Anticipation and post-construction impact of a metro extension on residential values: The case of Laval (Canada), 1995–2013," Journal of Transport Geography, Elsevier, vol. 62(C), pages 8-19.
    9. Gabriel M. Ahlfeldt & Volker Nitsch & Nicolai Wendland, 2019. "Ease versus noise: long-run changes in the value of transport (dis)amenities," CEP Discussion Papers dp1631, Centre for Economic Performance, LSE.
    10. Kyeongsu Kim & Michael L. Lahr, 2014. "The impact of Hudson-Bergen Light Rail on residential property appreciation," Papers in Regional Science, Wiley Blackwell, vol. 93, pages 79-97, November.
    11. Dubé, Jean & Legros, Diègo & Devaux, Nicolas, 2018. "From bus to tramway: Is there an economic impact of substituting a rapid mass transit system? An empirical investigation accounting for anticipation effect," Transportation Research Part A: Policy and Practice, Elsevier, vol. 110(C), pages 73-87.
    12. 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.
    13. Jonas Eliasson & Fredrik Kopsch & Svante Mandell & Mats Wilhelmsson, 2020. "Transport Mode and the Value of Accessibility–A Potential Input for Sustainable Investment Analysis," Sustainability, MDPI, Open Access Journal, vol. 12(5), pages 1-14, March.
    14. Comber, Sam & Arribas-Bel, Dani, 2017. "“Waiting on the train”: The anticipatory (causal) effects of Crossrail in Ealing," Journal of Transport Geography, Elsevier, vol. 64(C), pages 13-22.
    15. Xiyan (Jamie) Wang, 2017. "Subway capitalization effect in Beijing: Theory and evidence on the variation of the subway proximity premium," Papers in Regional Science, Wiley Blackwell, vol. 96(3), pages 495-518, August.
    16. Pope, Jaren C., 2008. "Buyer information and the hedonic: The impact of a seller disclosure on the implicit price for airport noise," Journal of Urban Economics, Elsevier, vol. 63(2), pages 498-516, March.
    17. Haizhen Wen & Zaiyuan Gui & Chuanhao Tian & Yue Xiao & Li Fang, 2018. "Subway Opening, Traffic Accessibility, and Housing Prices: A Quantile Hedonic Analysis in Hangzhou, China," Sustainability, MDPI, Open Access Journal, vol. 10(7), pages 1-23, June.
    18. Daniel P. McMillen, 2010. "Issues In Spatial Data Analysis," Journal of Regional Science, Wiley Blackwell, vol. 50(1), pages 119-141, February.
    19. Paolo Buonanno & Daniel Montolio & Josep Raya-Vílchez, 2013. "Housing prices and crime perception," Empirical Economics, Springer, vol. 45(1), pages 305-321, August.
    20. Mathilde Poulhes, 2017. "From Latin Quarter to Montmartre Investigating Parisian Real-Estate Prices," Working Papers 2017-13, Center for Research in Economics and Statistics.

    More about this item

    Keywords

    House Prices; Transport Innovations;

    JEL classification:

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

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:cep:cepdps:dp0611. 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: (). General contact details of provider: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP .

    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.