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Valuing Incremental Highway Capacity in a Network

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  • H. Allen Klaiber
  • V. Kerry Smith

Abstract

The importance of increments to an existing highway system depends upon their contributions to the accessibility provided by the existing network. Nearly 40 years ago, Mohring [1965] suggested this logic for planning optimal highway investment programs. He argued it could be implemented by measuring the quasi-rents generated by specific additions to an existing roadway system. This paper uses a unique set of additions to a loop roadway in metropolitan Phoenix, together with detailed records of housing sales over the past decade, to meet this need. We find that estimated increases in capitalized housing values due to four segments added during this period range from 73 to over 273 million dollars per mile of the roadway addition.

Suggested Citation

  • H. Allen Klaiber & V. Kerry Smith, 2010. "Valuing Incremental Highway Capacity in a Network," NBER Working Papers 15989, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:15989
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    References listed on IDEAS

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    Cited by:

    1. De Groot, Henri L.F. & Ossokina, Ioulia V. & Teulings, Coen N, 2014. "Welfare Benefits of Agglomeration and Worker Heterogeneity," CEPR Discussion Papers 10216, C.E.P.R. Discussion Papers.
    2. Ioulia Ossokina & Gerard Verweij, 2011. "Quasi-experimental evidence on the effect of traffic externalities on housing prices," ERSA conference papers ersa11p606, European Regional Science Association.
    3. 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.
    4. repec:eee:juecon:v:103:y:2018:i:c:p:67-82 is not listed on IDEAS
    5. Or Levkovich & Jan Rouwendal & Ramona Marwijk, 2016. "The effects of highway development on housing prices," Transportation, Springer, vol. 43(2), pages 379-405, March.

    More about this item

    JEL classification:

    • H4 - Public Economics - - Publicly Provided Goods
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General

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