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The London Congestion Charge And Property Prices: An Evaluation Of The Impact On Property Prices Inside And Outside The Zone

Author

Listed:
  • Zhang, Yi
  • Shing, Hui-Fai

Abstract

Congestion charging in London was introduced in February 2003 to reduce traffic levels in the centre of London. Postcode sector level property prices for sectors both inside and outside the zone are investigated under the premise that the benefits of transport innovation can be captured by property prices. If housing markets are efficient, residential property prices should capture all the benefits and costs to commuters that a location offers. The aim of this investigation is to firstly compare property prices inside and outside the congestion charging zone, and secondly to measure the sensitivity of house prices to distance from the zone boundary both inside and outside the zone. The main analysis is based on the quasi-experimental differences-in-differences approach. It is found that the gap between property price inside and outside the zone has actually reduced as a result of congestion charging. Also, after the implementation of the congestion charge, the sensitivity of house prices with respect to distance from the boundary has fallen for sectors inside the zone relative to sectors outside the zone.

Suggested Citation

  • Zhang, Yi & Shing, Hui-Fai, 2006. "The London Congestion Charge And Property Prices: An Evaluation Of The Impact On Property Prices Inside And Outside The Zone," MPRA Paper 4050, University Library of Munich, Germany, revised Dec 2006.
  • Handle: RePEc:pra:mprapa:4050
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    File URL: https://mpra.ub.uni-muenchen.de/4050/1/MPRA_paper_4050.pdf
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    References listed on IDEAS

    as
    1. Gibbons, Steve & Machin, Stephen, 2003. "Valuing English primary schools," Journal of Urban Economics, Elsevier, vol. 53(2), pages 197-219, March.
    2. Gatzlaff, Dean H & Haurin, Donald R, 1997. "Sample Selection Bias and Repeat-Sales Index Estimates," The Journal of Real Estate Finance and Economics, Springer, vol. 14(1-2), pages 33-50, Jan.-Marc.
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    Cited by:

    1. Cheng Keat Tang, 2016. "Traffic Externalities and Housing Prices: Evidence from the London Congestion Charge," SERC Discussion Papers 0205, Spatial Economics Research Centre, LSE.

    More about this item

    Keywords

    Congestion Charging; Property Prices; Difference in differences; Transport Innovations;

    JEL classification:

    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

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