If We Build it, Will They Pay? Predicting Property Price Effects of Transport Innovations

Bibliographic Data

ID4139860
AuthorsGabriel M Ahlfeldt (0000-0001-5664-3230, London School of Economics and Political Science, corresponding author)
Year2013
Volume45
Issue8
Pages1977-1994
Publication date2013-08-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueEnvironment and Planning A Economy and Space (JOURNAL)
Journal identifiersISSN: 0308-518X • E-ISSN: 1472-3409
PublisherSAGE Publications Inc (PUBLISHER)
DOI10.1068/a45429
OpenAlexW2061139029
LanguageEN
Citations received18
References cited36

In this study I apply a gravity-type labor-market accessibility model to the Greater London Area to investigate house price capitalization effects. The spatial scope of labor-market effects is found to be about 60 minutes. Doubling accessibility increases the utility of an average household by about 12%. I combine the gravity approach with a transport decision model that takes into account the urban rail network architecture, allows for mode switching, and thus accounts for the effective accessibility offered by a station, to predict the property price effects of the 1999 Jubilee Line and DLR extension. A considerable degree of heterogeneity is predicted both in terms of the magnitude as well as the spatial extent of price effects around new stations. A quasi-experimental property price analysis reveals that the model performs well in predicting the effective capitalization effects, suggesting that the approach might be a viable ingredient in transport planning

Capitalization · Econometrics · Economics · House price · Microeconomics · Computer Science · Economic and Environmental Valuation · Housing Market and Economics · Urban Transport and Accessibility

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