Estimating the Impact on Housing Prices Brought by a Light Rail Infrastructure in France
E Boucq, STRATEC, BE
This paper aims measuring the added value generated by the implementation of a light rail infrastructure on housing prices, using hedonic method. The case of investigation is the T2 ligt rail in the Hauts-de-Seine department in France.
The development of transport infrastructure has economic effects enjoyed by economic agents located at its proximity, measured in particular by its effect on housing prices. Based on this observation, this paper aims measuring this added value generated by the implementation of public transport infrastructure. The immediate consequence of the implementation of such an infrastructure is accessibility modifications. As we assume that housing prices are influenced by accessibility, we turn to hedonic theory, which can take into account the heterogeneity of the real estate in the empirical estimates of their prices. We have selected the following field of investigation: the Hauts-de-Seine department in France, and the light rail infrastructure brought into service in 1997 in this department. The study period extends from 1993 to 2004. To achieve this study, we have worked on defining the optimal mapping in order to get geographical areas designed such as to eliminate effects of smoothing and bias induced by the inclusion of non significant observations. So we conducted a hedonic analysis, in which we have introduced the usual determinants of price (i.e. the structure of dwelling and its immediate environment), and we focused on 3 kinds of issues: the choice of functional forms, including using Box-Cox specification for the variable to be explained, in order to approximate the actual shape by maximum likelihood; the type of measure for the impact of accessibility on real estate pricing, in level and in variation induced by the new infrastructure; the temporal aspect: we have worked over a period that is long enough before and after the implementation of the new infrastructure to distinguish the anticipation effects from learning effects.
Association for European Transport