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Expected Transport Accessibility Improvement and House Prices: Evidence from the Construction of the World’s Longest Undersea Road Tunnel

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Listed:
  • Štěpán Mikula

    (Masaryk University, Brno, Czech Republic)

  • Peter Molnár

    (University of Stavanger, Stavanger, Norway, Prague University of Economics and Business, Prague, Czech Republic, Nicolaus Copernicus University in Torun, Torun, Poland)

Abstract

This paper studies the impact of expected transport accessibility improvement on house prices. We identify the effect exploiting a quasi-natural experiment created by the approval and construction of the Ryfast tunnel system in Rogaland, Norway, which shortened the travelling time to the affected municipality from 62 to 24 minutes. Estimates of a repeated sales model in a difference-in-differences framework show that the expectation of improvement in transport accessibility connected with the construction of the tunnel system led to an increase in house prices by 10.1–12.8\% on average. That effect grew as the opening of the tunnel drew closer and was driven by less valuable houses.

Suggested Citation

  • Štěpán Mikula & Peter Molnár, 2022. "Expected Transport Accessibility Improvement and House Prices: Evidence from the Construction of the World’s Longest Undersea Road Tunnel," MUNI ECON Working Papers 2022-05, Masaryk University, revised Feb 2023.
    • Handle: RePEc:mub:wpaper:2022-05
    DOI: 10.5817/WP_MUNI_ECON_2022-05
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    References listed on IDEAS

    as
    1. Helen XH Bao & Johan P Larsson & Vivien Wong, 2021. "Light at the end of the tunnel:The impacts of expected major transport improvements on residential property prices," Urban Studies, Urban Studies Journal Limited, vol. 58(14), pages 2971-2990, November.
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    3. He, Sylvia Y., 2020. "Regional impact of rail network accessibility on residential property price: Modelling spatial heterogeneous capitalisation effects in Hong Kong," Transportation Research Part A: Policy and Practice, Elsevier, vol. 135(C), pages 244-263.
    4. Liu, Xueli & Jiang, Chunxia & Wang, Feng & Yao, Shujie, 2021. "The impact of high-speed railway on urban housing prices in China: A network accessibility perspective," Transportation Research Part A: Policy and Practice, Elsevier, vol. 152(C), pages 84-99.
    5. Jen-Jia Lin & Chi-Hau Hwang, 2004. "Analysis of property prices before and after the opening of the Taipei subway system," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 38(4), pages 687-704, December.
    6. Rokicki, Bartlomiej & Stępniak, Marcin, 2018. "Major transport infrastructure investment and regional economic development – An accessibility-based approach," Journal of Transport Geography, Elsevier, vol. 72(C), pages 36-49.
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    More about this item

    Keywords

    transport accessibility; expectations; house prices; Ryfast tunnel system; construction; Norway;
    All these keywords.

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location
    • R4 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics

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