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Anticipatory Effects of Rail Upgrades: Auckland's Western Line

  • Arthur Grimes

    ()

  • Chris Young

We examine effects of urban passenger rail upgrades to Auckland’s Western Line, including double tracking, station development, and related urban renewal projects. The results are used to assess anticipated net benefits of the developments. The rail-related upgrades are expected to be completed in late 2010, but have been well publicised and so should already be factored into people’s location and pricing decisions. Our analysis compares developments near Western Line stations with developments elsewhere in Auckland, thus controlling for wider regional and macroeconomic impacts. As well as describing developments, we estimate the impact on property values of station proximity. Changes in property values are used to identify benefits due to the upgrades since prospective property buyers bid up the price of a property to include the net benefits; otherwise they would be outbid by another prospective buyer. “Net benefits” include gross benefits less direct additional property-tax costs due to the project but do not include costs borne elsewhere (though these can be accounted for separately). We utilise actual property sale prices using a repeat sales methodology to measure price appreciation. Specifically, we examine whether price appreciation is affected by proximity to Western Line stations, allowing for different effects at each station. Our main focus is on residential values but we refer also to commercial and industrial applications.

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File URL: http://www-sre.wu.ac.at/ersa/ersaconfs/ersa10/ERSA2010finalpaper123.pdf
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Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa10p123.

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Date of creation: Sep 2011
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Handle: RePEc:wiw:wiwrsa:ersa10p123
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  1. 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.
  2. Roback, Jennifer, 1982. "Wages, Rents, and the Quality of Life," Journal of Political Economy, University of Chicago Press, vol. 90(6), pages 1257-78, December.
  3. Bourassa, Steven C. & Hoesli, Martin & Sun, Jian, 2006. "A simple alternative house price index method," Journal of Housing Economics, Elsevier, vol. 15(1), pages 80-97, March.
  4. Baldwin, Richard E., 2001. "Core-periphery model with forward-looking expectations," Regional Science and Urban Economics, Elsevier, vol. 31(1), pages 21-49, February.
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  6. Matthew E. Kahn, 2007. "Gentrification Trends in New Transit-Oriented Communities: Evidence from 14 Cities That Expanded and Built Rail Transit Systems," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 35(2), pages 155-182, 06.
  7. Rappaport, Jordan & Kahn, Matthew E. & Glaeser, Edward, 2008. "Why Do The Poor Live In Cities? The Role of Public Transportation," Scholarly Articles 2958224, Harvard University Department of Economics.
  8. Morito Tsutsumi & Hajime Seya, 2008. "Measuring the impact of large-scale transportation projects on land price using spatial statistical models," Papers in Regional Science, Wiley Blackwell, vol. 87(3), pages 385-401, 08.
  9. de Vries, Paul & de Haan, Jan & van der Wal, Erna & Mariën, Gust, 2009. "A house price index based on the SPAR method," Journal of Housing Economics, Elsevier, vol. 18(3), pages 214-223, September.
  10. Edward L. Glaeser & Matthew E. Kahn & Jordan Rappaport, 2000. "Why Do the Poor Live in Cities?," NBER Working Papers 7636, National Bureau of Economic Research, Inc.
  11. Gibbons, Stephen & Machin, Stephen, 2005. "Valuing rail access using transport innovations," Journal of Urban Economics, Elsevier, vol. 57(1), pages 148-169, January.
  12. Haughwout, Andrew F., 2002. "Public infrastructure investments, productivity and welfare in fixed geographic areas," Journal of Public Economics, Elsevier, vol. 83(3), pages 405-428, March.
  13. Arthur Grimes & Yun Liang, 2007. "Spatial Determinants of Land Prices in Auckland:Does the Metropolitan Urban Limit Have an Effect?," Working Papers 07_09, Motu Economic and Public Policy Research.
  14. Winston, Clifford & Maheshri, Vikram, 2007. "On the social desirability of urban rail transit systems," Journal of Urban Economics, Elsevier, vol. 62(2), pages 362-382, September.
  15. 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, 09.
  16. Austin Nichols & Mark E Schaffer, 2007. "Clustered standard errors in Stata," United Kingdom Stata Users' Group Meetings 2007 07, Stata Users Group.
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