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The Impacts Of Transportation Infrastructure On Property Values: A Higher‐Order Spatial Econometrics Approach

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  • Jeffrey P. Cohen
  • Catherine Morrison Paul

Abstract

ABSTRACT We evaluate the impacts of enhanced transportation systems on property values for U.S. manufacturing firms, allowing for higher‐order spatial error correlation. We use a state‐level model of production cost and input demand that recognizes the productive contribution of public transportation infrastructure stocks. Our findings include significant impacts on property shadow values and input composition from both public highway and airport investment. We also find that these effects have a spatial dimension that depends on the proximity of the transport system; at least one and as many as three spatial error lags are significant in our estimating equations. Further, recognizing production growth from transportation system improvements augments the associated incentives for private capital investment.

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  • Jeffrey P. Cohen & Catherine Morrison Paul, 2007. "The Impacts Of Transportation Infrastructure On Property Values: A Higher‐Order Spatial Econometrics Approach," Journal of Regional Science, Wiley Blackwell, vol. 47(3), pages 457-478, August.
    • Handle: RePEc:bla:jregsc:v:47:y:2007:i:3:p:457-478
    DOI: 10.1111/j.1467-9787.2007.00516.x
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    1. Baumol,William J. & Oates,Wallace E., 1988. "The Theory of Environmental Policy," Cambridge Books, Cambridge University Press, number 9780521322249, September.
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    1. Alejandro Plastina & Lilyan Fulginiti, 2012. "Rates of return to public agricultural research in 48 US states," Journal of Productivity Analysis, Springer, vol. 37(2), pages 95-113, April.
    2. Jeffrey Thompson, 2010. "Prioritizing Approaches to Economic Development in New England: Skills, Infrastructure, and Tax Incentives," Published Studies priorities_september7_per, Political Economy Research Institute, University of Massachusetts at Amherst.
    3. Bo-sin Tang & Kwan To Wong, 2020. "Assessing externality: Successive event studies on market impacts of new housing development on an old residential neighbourhood," Environment and Planning B, , vol. 47(1), pages 156-173, January.
    4. Harald Badinger & Peter Egger, 2015. "Fixed Effects and Random Effects Estimation of Higher-order Spatial Autoregressive Models with Spatial Autoregressive and Heteroscedastic Disturbances," Spatial Economic Analysis, Taylor & Francis Journals, vol. 10(1), pages 11-35, March.
    5. Eckhardt Bode, 2008. "Delineating Metropolitan Areas Using Land Prices," Journal of Regional Science, Wiley Blackwell, vol. 48(1), pages 131-163, February.
    6. Deepak Premkumar & Austin Quackenbush & Georgeanne Artz & Peter Orazem, 2013. "If You Build it, Will They Come?: Fiscal Federalism, Local Provision of Public Tourist Amenities, and the Vision Iowa Fund," The Review of Regional Studies, Southern Regional Science Association, vol. 43(2,3), pages 155-173, Winter.
    7. Posada, Héctor M. & García-Suaza, Andres, 2022. "Transit infrastructure and informal housing: Assessing an expansion of Medellín's Metrocable system," Transport Policy, Elsevier, vol. 128(C), pages 209-228.
    8. Bottasso, Anna & Conti, Maurizio, 2009. "Scale economies, technology and technical change in the water industry: Evidence from the English water only sector," Regional Science and Urban Economics, Elsevier, vol. 39(2), pages 138-147, March.
    9. Jaghdani, Tinoush Jamali & Brümmer, Bernhard, 2011. "Demand for Irrigation Water for Pistachio Production from Depleting Groundwater Resources: Spatial Econometric Approach," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114457, European Association of Agricultural Economists.
    10. Harald Badinger & Peter Egger, 2009. "Estimation of Higher-Order Spatial Autoregressive Panel Data Error Component Models," CESifo Working Paper Series 2556, CESifo.
    11. Miguel A Márquez & Julian Ramajo & Geoffrey Hewings, 2017. "Regional Public Stock Reductions in Spain: Estimations from a Multiregional Spatial Vector Autorregressive Model," REGION, European Regional Science Association, vol. 4, pages 129-146.
    12. Harald Badinger & Peter Egger, 2008. "GM Estimation of Higher Order Spatial Autoregressive Processes in Panel Data Error Component Models," CESifo Working Paper Series 2301, CESifo.
    13. Harald Badinger & Peter Egger, 2008. "GM Estimation of Higher-Order Spatial Autoregressive Processes in Cross-Section Models with Heteroskedastic Disturbances," CESifo Working Paper Series 2356, CESifo.
    14. Clark, David & Pennington-Cross, Anthony, 2016. "Determinants of industrial property rents in the Chicago metropolitan area," Regional Science and Urban Economics, Elsevier, vol. 56(C), pages 34-45.
    15. Julie Bulteau & Thierry Feuillet & Rémy Le Boennec, 2018. "Spatial Heterogeneity of Sustainable Transportation Offer Values: A Comparative Analysis of Nantes Urban and Periurban/Rural Areas (France)," Post-Print halshs-01706911, HAL.
    16. Genevieve Giuliano & Jenny Schuetz & Eun Jin Shin, 2016. "Is Los Angeles Becoming Transit Oriented?," Finance and Economics Discussion Series 2016-4, Board of Governors of the Federal Reserve System (U.S.).
    17. Zhenhua Chen & Kingsley E. Haynes, 2015. "Regional Impact of Public Transportation Infrastructure," Economic Development Quarterly, , vol. 29(3), pages 275-291, August.
    18. Peter H. Egger & Michaela Kesina & Sergey Nigai, 2013. "Contagious Energy Prices," The World Economy, Wiley Blackwell, vol. 36(3), pages 349-362, March.
    19. Efthymiou, D. & Antoniou, C., 2013. "How do transport infrastructure and policies affect house prices and rents? Evidence from Athens, Greece," Transportation Research Part A: Policy and Practice, Elsevier, vol. 52(C), pages 1-22.
    20. Wiśniewski Szymon, 2018. "Relations between theoretical and real-time accessibility for inter-regional, intra-regional and intra-urban car journeys:The example of Poland," Bulletin of Geography. Socio-economic Series, Sciendo, vol. 41(41), pages 45-58, September.
    21. Irani Arraiz & David M. Drukker & Harry H. Kelejian & Ingmar R. Prucha, 2010. "A Spatial Cliff‐Ord‐Type Model With Heteroskedastic Innovations: Small And Large Sample Results," Journal of Regional Science, Wiley Blackwell, vol. 50(2), pages 592-614, May.
    22. Yi Fan & Ho Pin Teo & Wayne X. Wan, 2021. "Public transport, noise complaints, and housing: Evidence from sentiment analysis in Singapore," Journal of Regional Science, Wiley Blackwell, vol. 61(3), pages 570-596, June.
    23. Stepniak, Marcin & Rosik, Piotr, 2013. "Accessibility improvement, territorial cohesion and spillovers: a multidimensional evaluation of two motorway sections in Poland," Journal of Transport Geography, Elsevier, vol. 31(C), pages 154-163.
    24. Cohen, Jeffrey P. & Schaffner, Sandra, 2019. "A new highway in Germany and the impacts on real estate prices," Ruhr Economic Papers 821, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    25. Fragoso Januário, João & Costa, Álvaro & Oliveira Cruz, Carlos & Miranda Sarmento, Joaquim & Faria e Sousa, Vítor, 2021. "Transport infrastructure, accessibility, and spillover effects: An empirical analysis of the Portuguese real estate market from 2000 to 2018," Research in Transportation Economics, Elsevier, vol. 90(C).

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