IDEAS home Printed from https://ideas.repec.org/a/eee/jotrge/v62y2017icp8-19.html
   My bibliography  Save this article

Anticipation and post-construction impact of a metro extension on residential values: The case of Laval (Canada), 1995–2013

Author

Listed:
  • Devaux, Nicolas
  • Dubé, Jean
  • Apparicio, Philippe

Abstract

The application of hedonic pricing models has a long history in estimating the externalities associated with urban infrastructure, such as public transportation. However, results accuracy crucially depends on methodological and empirical considerations such as: i) presence of spatial latent component (spatial autocorrelation); ii) temporal breaks related to different periods over which the infrastructure is built; and iii) heterogeneity of the effect along the line and stations. This paper aims to assess the impact of Montréal's metro extension to the suburb city of Laval (announced in 1998 and started operating in 2007). A spatial difference-in-difference (SDID) estimator based on a repeated sales approach is used to isolate the impact of the proximity to the new infrastructure on single-family house prices depending on the implementation phases and the stations. The results suggest that among the three new infrastructures, only one shows a positive impact of proximity after the first operation of the transit service. The study results tend to relativize the sometimes high expectations in terms of economic impacts of such a project, at least for residential properties.

Suggested Citation

  • Devaux, Nicolas & Dubé, Jean & Apparicio, Philippe, 2017. "Anticipation and post-construction impact of a metro extension on residential values: The case of Laval (Canada), 1995–2013," Journal of Transport Geography, Elsevier, vol. 62(C), pages 8-19.
    • Handle: RePEc:eee:jotrge:v:62:y:2017:i:c:p:8-19
    DOI: 10.1016/j.jtrangeo.2017.05.002
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0966692316305075
    Download Restriction: no
    File URL: https://libkey.io/10.1016/j.jtrangeo.2017.05.002?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Daniel P. McMillen, 2010. "Issues In Spatial Data Analysis," Journal of Regional Science, Wiley Blackwell, vol. 50(1), pages 119-141, February.
    2. Kyeongsu Kim & Michael L. Lahr, 2014. "The impact of Hudson-Bergen Light Rail on residential property appreciation," Papers in Regional Science, Wiley Blackwell, vol. 93, pages 79-97, November.
    3. Julie Le Gallo, 2002. "Économétrie spatiale : l'autocorrélation spatiale dans les modèles de régression linéaire," Économie et Prévision, Programme National Persée, vol. 155(4), pages 139-157.
    4. Gatzlaff, Dean H. & Haurin, Donald R., 1998. "Sample Selection and Biases in Local House Value Indices," Journal of Urban Economics, Elsevier, vol. 43(2), pages 199-222, March.
    5. Dubé, Jean & Rosiers, François Des & Thériault, Marius & Dib, Patricia, 2011. "Economic impact of a supply change in mass transit in urban areas: A Canadian example," Transportation Research Part A: Policy and Practice, Elsevier, vol. 45(1), pages 46-62, January.
    6. Landis, John & Guhathakurta, Subhrajit & Zhang, Ming, 1994. "Capitalization of Transit Investments into Single-Family Home Prices: A Comparative Analysis of Five California Rail Transit Systems," University of California Transportation Center, Working Papers qt80f3p5n1, University of California Transportation Center.
    7. Seiji S.C. Steimetz, 2010. "Spatial Multipliers In Hedonic Analysis: A Comment On “Spatial Hedonic Models Of Airport Noise, Proximity, And Housing Prices”," Journal of Regional Science, Wiley Blackwell, vol. 50(5), pages 995-998, December.
    8. James P. LeSage & R. Kelley Pace, 2014. "The Biggest Myth in Spatial Econometrics," Econometrics, MDPI, vol. 2(4), pages 1-33, December.
    9. Case, Karl E & Shiller, Robert J, 1989. "The Efficiency of the Market for Single-Family Homes," American Economic Review, American Economic Association, vol. 79(1), pages 125-137, March.
    10. Higgins, Christopher D. & Kanaroglou, Pavlos S., 2016. "A latent class method for classifying and evaluating the performance of station area transit-oriented development in the Toronto region," Journal of Transport Geography, Elsevier, vol. 52(C), pages 61-72.
    11. Karl E. Case & Robert J. Shiller, 1987. "Prices of single-family homes since 1970: new indexes for four cities," New England Economic Review, Federal Reserve Bank of Boston, issue Sep, pages 45-56.
    12. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    13. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74(2), pages 132-132.
    14. Mohammad, Sara I. & Graham, Daniel J. & Melo, Patricia C. & Anderson, Richard J., 2013. "A meta-analysis of the impact of rail projects on land and property values," Transportation Research Part A: Policy and Practice, Elsevier, vol. 50(C), pages 158-170.
    15. Yan, Sisi & Delmelle, Eric & Duncan, Michael, 2012. "The impact of a new light rail system on single-family property values in Charlotte, North Carolina," The Journal of Transport and Land Use, Center for Transportation Studies, University of Minnesota, vol. 5(2), pages 60-67.
    16. Dean H. Gatzlaff & Marc T. Smith, 1993. "The Impact of the Miami Metrorail on the Value of Residences near Station Locations," Land Economics, University of Wisconsin Press, vol. 69(1), pages 54-66.
    17. Kelejian, Harry H & Prucha, Ingmar R, 1998. "A Generalized Spatial Two-Stage Least Squares Procedure for Estimating a Spatial Autoregressive Model with Autoregressive Disturbances," The Journal of Real Estate Finance and Economics, Springer, vol. 17(1), pages 99-121, July.
    18. 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.
    19. Cervero, Robert & Landis, John, 1997. "Twenty years of the Bay Area Rapid Transit system: Land use and development impacts," Transportation Research Part A: Policy and Practice, Elsevier, vol. 31(4), pages 309-333, July.
    20. Lung-fei Lee, 2003. "Best Spatial Two-Stage Least Squares Estimators for a Spatial Autoregressive Model with Autoregressive Disturbances," Econometric Reviews, Taylor & Francis Journals, vol. 22(4), pages 307-335.
    21. Kelejian, Harry H & Prucha, Ingmar R, 1999. "A Generalized Moments Estimator for the Autoregressive Parameter in a Spatial Model," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(2), pages 509-533, May.
    22. Wang, Ferdinand T. & Zorn, Peter M., 1997. "Estimating House Price Growth with Repeat Sales Data: What's the Aim of the Game?," Journal of Housing Economics, Elsevier, vol. 6(2), pages 93-118, June.
    23. Bae, Chang-Hee Christine & Jun, Myung-Jin & Park, Hyeon, 2003. "The impact of Seoul's subway Line 5 on residential property values," Transport Policy, Elsevier, vol. 10(2), pages 85-94, April.
    24. Sherry Ryan, 2005. "The Value of Access to Highways and Light Rail Transit: Evidence for Industrial and Office Firms," Urban Studies, Urban Studies Journal Limited, vol. 42(4), pages 751-764, April.
    25. Susan Handy, 2005. "Smart Growth and the Transportation-Land Use Connection: What Does the Research Tell Us?," International Regional Science Review, , vol. 28(2), pages 146-167, April.
    26. Dubin, Robin A, 1998. "Predicting House Prices Using Multiple Listings Data," The Journal of Real Estate Finance and Economics, Springer, vol. 17(1), pages 35-59, July.
    27. Can, Ayse, 1992. "Specification and estimation of hedonic housing price models," Regional Science and Urban Economics, Elsevier, vol. 22(3), pages 453-474, September.
    28. Dubé, Jean & Legros, Diègo & Thériault, Marius & Des Rosiers, François, 2014. "A spatial Difference-in-Differences estimator to evaluate the effect of change in public mass transit systems on house prices," Transportation Research Part B: Methodological, Elsevier, vol. 64(C), pages 24-40.
    29. Daniel Baldwin Hess & Tangerine Maria Almeida, 2007. "Impact of Proximity to Light Rail Rapid Transit on Station-area Property Values in Buffalo, New York," Urban Studies, Urban Studies Journal Limited, vol. 44(5-6), pages 1041-1068, May.
    30. Sebastian Brandt & Wolfgang Maennig, 2012. "The impact of rail access on condominium prices in Hamburg," Transportation, Springer, vol. 39(5), pages 997-1017, September.
    31. Dubé, Jean & Thériault, Marius & Des Rosiers, François, 2013. "Commuter rail accessibility and house values: The case of the Montreal South Shore, Canada, 1992–2009," Transportation Research Part A: Policy and Practice, Elsevier, vol. 54(C), pages 49-66.
    32. 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.
    33. Ghebreegziabiher Debrezion & Eric Pels & Piet Rietveld, 2007. "The Impact of Railway Stations on Residential and Commercial Property Value: A Meta-analysis," The Journal of Real Estate Finance and Economics, Springer, vol. 35(2), pages 161-180, August.
    34. E Heikkila & P Gordon & J I Kim & R B Peiser & H W Richardson & D Dale-Johnson, 1989. "What Happened to the CBD-Distance Gradient?: Land Values in a Policentric City," Environment and Planning A, , vol. 21(2), pages 221-232, February.
    35. Claudio A. Agostini & Gastón A. Palmucci, 2008. "The Anticipated Capitalisation Effect of a New Metro Line on Housing Prices," Fiscal Studies, Institute for Fiscal Studies, vol. 29(2), pages 233-256, June.
    36. Glaeser, Edward L. & Kahn, Matthew E. & Rappaport, Jordan, 2008. "Why do the poor live in cities The role of public transportation," Journal of Urban Economics, Elsevier, vol. 63(1), pages 1-24, January.
    37. Voith Richard, 1993. "Changing Capitalization of CBD-Oriented Transportation Systems: Evidence from Philadelphia, 1970-1988," Journal of Urban Economics, Elsevier, vol. 33(3), pages 361-376, May.
    38. McDonald, John F. & Osuji, Clifford I., 1995. "The effect of anticipated transportation improvement on residential land values," Regional Science and Urban Economics, Elsevier, vol. 25(3), pages 261-278, June.
    39. 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, September.
    40. David A. Hensher, 2016. "Why is Light Rail Starting to Dominate Bus Rapid Transit Yet Again?," Transport Reviews, Taylor & Francis Journals, vol. 36(3), pages 289-292, May.
    41. Stephen Gibbons & Stephen Machin, 2008. "Valuing school quality, better transport, and lower crime: evidence from house prices," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 24(1), pages 99-119, spring.
    42. Cervero, Robert, 2006. "Effects of Light and Commuter Rail Transit on Land Prices: Experiences in San Diego County," University of California Transportation Center, Working Papers qt75n1b5xc, University of California Transportation Center.
    43. David M. Drukker & Ingmar Prucha & Rafal Raciborski, 2013. "Maximum likelihood and generalized spatial two-stage least-squares estimators for a spatial-autoregressive model with spatial-autoregressive disturbances," Stata Journal, StataCorp LP, vol. 13(2), pages 221-241, June.
    44. Vladimir Bajic, 1983. "The Effects of a New Subway Line on Housing Prices in Metropolitan Toronto," Urban Studies, Urban Studies Journal Limited, vol. 20(2), pages 147-158, May.
    45. Dewees, D. N., 1976. "The effect of a subway on residential property values in Toronto," Journal of Urban Economics, Elsevier, vol. 3(4), pages 357-369, October.
    46. Carol Atkinson-Palombo, 2010. "Comparing the Capitalisation Benefits of Light-rail Transit and Overlay Zoning for Single-family Houses and Condos by Neighbourhood Type in Metropolitan Phoenix, Arizona," Urban Studies, Urban Studies Journal Limited, vol. 47(11), pages 2409-2426, October.
    47. Mulley, Corinne & Tsai, Chi-Hong (Patrick), 2016. "When and how much does new transport infrastructure add to property values? Evidence from the bus rapid transit system in Sydney, Australia," Transport Policy, Elsevier, vol. 51(C), pages 15-23.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Rémy Le Boennec & Julie Bulteau & Thierry Feuillet, 2022. "The role of commuter rail accessibility in the formation of residential land values: exploring spatial heterogeneity in peri-urban and remote areas," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 69(1), pages 163-186, August.
    2. Bardaka, Eleni & Delgado, Michael S. & Florax, Raymond J.G.M., 2018. "Causal identification of transit-induced gentrification and spatial spillover effects: The case of the Denver light rail," Journal of Transport Geography, Elsevier, vol. 71(C), pages 15-31.
    3. Sonia Yousfi & Jean Dubé & Diègo Legros & Sotirios Thanos, 2020. "Mass appraisal without statistical estimation: a simplified comparable sales approach based on a spatiotemporal matrix," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 64(2), pages 349-365, April.
    4. Melser, Daniel, 2020. "Estimating the housing capitalization effects of new infrastructure: Should we be using rents instead of prices?," Transportation Research Part A: Policy and Practice, Elsevier, vol. 138(C), pages 402-421.
    5. AlQuhtani, Saad & Anjomani, Ardeshir, 2019. "Do rail transit stations affect housing value changes? The Dallas Fort-Worth metropolitan area case and implications," Journal of Transport Geography, Elsevier, vol. 79(C), pages 1-1.
    6. Dubé, Jean & Andrianary, Eugénie & Assad-Déry, François & Poupart, Janie & Simard, Justine, 2018. "Exploring difference in value uplift resulting from new bus rapid transit routes within a medium size metropolitan area," Journal of Transport Geography, Elsevier, vol. 72(C), pages 258-269.
    7. Dubé, Jean & Le Gallo, Julie & Des Rosiers, François & Legros, Diègo & Champagne, Marie-Pier, 2024. "An integrated causal framework to evaluate uplift value with an example on change in public transport supply," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 185(C).
    8. Zhang, Haoran, 2020. "Metro and urban growth: Evidence from China," Journal of Transport Geography, Elsevier, vol. 85(C).
    9. Champagne, Marie-Pier & Dubé, Jean & Legros, Diègo, 2024. "Standing strong? The causal impact of metro stations on service firms’ survival," Transportation Research Part A: Policy and Practice, Elsevier, vol. 181(C).
    10. Tian, Chuanhao & Peng, Ying & Wen, Haizhen & Yue, Wenze & Fang, Li, 2021. "Subway boosts housing values, for whom: A quasi-experimental analysis," Research in Transportation Economics, Elsevier, vol. 90(C).
    11. Dai, Shufen & Qian, Yawen & He, Weijun & Wang, Chen & Shi, Tianyu, 2022. "The spatial spillover effect of China's carbon emissions trading policy on industrial carbon intensity: Evidence from a spatial difference-in-difference method," Structural Change and Economic Dynamics, Elsevier, vol. 63(C), pages 139-149.
    12. Schmidt, Adam & Bardaka, Eleni & Thill, Jean-Claude, 2022. "Causal, spatiotemporal impacts of transit investments: Exploring spatial heterogeneity from announcement through long-run operation," Transportation Research Part A: Policy and Practice, Elsevier, vol. 161(C), pages 151-169.
    13. Bardaka, Eleni & Delgado, Michael S. & Florax, Raymond J.G.M., 2019. "A spatial multiple treatment/multiple outcome difference-in-differences model with an application to urban rail infrastructure and gentrification," Transportation Research Part A: Policy and Practice, Elsevier, vol. 121(C), pages 325-345.
    14. Forouhar, Amir, 2022. "Rail transit station and neighbourhood change: A mixed-method analysis with respect to neighbourhood context," Journal of Transport Geography, Elsevier, vol. 102(C).
    15. Helen XH Bao & Johan P Larsson & Vivien Wong, 2021. "Light at the end of the tunnel:The impacts of expected major transport improvements on residential property prices," Urban Studies, Urban Studies Journal Limited, vol. 58(14), pages 2971-2990, November.
    16. John Murray & Eleni Bardaka, 2022. "Evaluating the spatial and temporal distribution of beltway effects on housing prices using difference-in-differences methods," Transportation, Springer, vol. 49(6), pages 1963-1998, December.
    17. Maha AbdelHalim & Jean Dubé & Nicolas Devaux, 2021. "The Spatial and Temporal Decomposition of the Effect of Floods on Single-Family House Prices: A Laval, Canada Case Study," Sustainability, MDPI, vol. 13(9), pages 1-18, May.
    18. Champagne, Marie-Pier & Dubé, Jean & Barla, Philippe, 2022. "Build it and they will come: How does a new public transit station influence building construction?," Journal of Transport Geography, Elsevier, vol. 100(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dubé, Jean & Legros, Diègo & Devaux, Nicolas, 2018. "From bus to tramway: Is there an economic impact of substituting a rapid mass transit system? An empirical investigation accounting for anticipation effect," Transportation Research Part A: Policy and Practice, Elsevier, vol. 110(C), pages 73-87.
    2. Diao, Mi & Leonard, Delon & Sing, Tien Foo, 2017. "Spatial-difference-in-differences models for impact of new mass rapid transit line on private housing values," Regional Science and Urban Economics, Elsevier, vol. 67(C), pages 64-77.
    3. Dubé, Jean & Le Gallo, Julie & Des Rosiers, François & Legros, Diègo & Champagne, Marie-Pier, 2024. "An integrated causal framework to evaluate uplift value with an example on change in public transport supply," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 185(C).
    4. Dubé, Jean & Legros, Diègo & Thériault, Marius & Des Rosiers, François, 2014. "A spatial Difference-in-Differences estimator to evaluate the effect of change in public mass transit systems on house prices," Transportation Research Part B: Methodological, Elsevier, vol. 64(C), pages 24-40.
    5. Dubé, Jean & Thériault, Marius & Des Rosiers, François, 2013. "Commuter rail accessibility and house values: The case of the Montreal South Shore, Canada, 1992–2009," Transportation Research Part A: Policy and Practice, Elsevier, vol. 54(C), pages 49-66.
    6. Dubé, Jean & Andrianary, Eugénie & Assad-Déry, François & Poupart, Janie & Simard, Justine, 2018. "Exploring difference in value uplift resulting from new bus rapid transit routes within a medium size metropolitan area," Journal of Transport Geography, Elsevier, vol. 72(C), pages 258-269.
    7. Haizhen Wen & Zaiyuan Gui & Chuanhao Tian & Yue Xiao & Li Fang, 2018. "Subway Opening, Traffic Accessibility, and Housing Prices: A Quantile Hedonic Analysis in Hangzhou, China," Sustainability, MDPI, vol. 10(7), pages 1-23, June.
    8. Zhong, Haotian & Li, Wei, 2016. "Rail transit investment and property values: An old tale retold," Transport Policy, Elsevier, vol. 51(C), pages 33-48.
    9. Comber, Sam & Arribas-Bel, Dani, 2017. "“Waiting on the train”: The anticipatory (causal) effects of Crossrail in Ealing," Journal of Transport Geography, Elsevier, vol. 64(C), pages 13-22.
    10. Dubé, Jean & Rosiers, François Des & Thériault, Marius & Dib, Patricia, 2011. "Economic impact of a supply change in mass transit in urban areas: A Canadian example," Transportation Research Part A: Policy and Practice, Elsevier, vol. 45(1), pages 46-62, January.
    11. Kyeongsu Kim & Michael L. Lahr, 2014. "The impact of Hudson-Bergen Light Rail on residential property appreciation," Papers in Regional Science, Wiley Blackwell, vol. 93, pages 79-97, November.
    12. Rennert, Lindiwe, 2022. "A meta-analysis of the impact of rail stations on property values: Applying a transit planning lens," Transportation Research Part A: Policy and Practice, Elsevier, vol. 163(C), pages 165-180.
    13. AlQuhtani, Saad & Anjomani, Ardeshir, 2019. "Do rail transit stations affect housing value changes? The Dallas Fort-Worth metropolitan area case and implications," Journal of Transport Geography, Elsevier, vol. 79(C), pages 1-1.
    14. Aliyu Ahmad Aliyu & Olurotimi Adebowale Kemiki & Muhammad Umar Bello, 2018. "Transportation Accessibility Benefit and the Dynamic Pattern of Real Estate Prices: Emerging Literature," Traektoriâ Nauki = Path of Science, Altezoro, s.r.o. & Dialog, vol. 4(11), pages 1001-1016, November.
    15. Hyun, Dongwoo & Milcheva, Stanimira, 2019. "Spatio-temporal effects of an urban development announcement and its cancellation on house prices: A quasi-natural experiment," Journal of Housing Economics, Elsevier, vol. 43(C), pages 23-36.
    16. Tian, Chuanhao & Peng, Ying & Wen, Haizhen & Yue, Wenze & Fang, Li, 2021. "Subway boosts housing values, for whom: A quasi-experimental analysis," Research in Transportation Economics, Elsevier, vol. 90(C).
    17. Ahlfeldt, Gabriel M. & Nitsch, Volker & Wendland, Nicolai, 2019. "Ease vs. noise: Long-run changes in the value of transport (dis)amenities," Journal of Environmental Economics and Management, Elsevier, vol. 98(C).
    18. Chun-Chang Lee & Chi-Ming Liang & Hui-Chuan Hong, 2020. "The Impact of a Mass Rapid Transit System on Neighborhood Housing Prices: An Application of Difference-In-Difference and Spatial Econometrics," Real Estate Management and Valuation, Sciendo, vol. 28(1), pages 28-40, March.
    19. Mathur, Shishir, 2019. "An evaluative framework for examining the use of land value capture to fund public transportation projects," Land Use Policy, Elsevier, vol. 86(C), pages 357-364.
    20. Amarin Siripanich & Taha Hossein Rashidi & Emily Moylan, 2019. "Interaction of Public Transport Accessibility and Residential Property Values Using Smart Card Data," Sustainability, MDPI, vol. 11(9), pages 1-24, May.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jotrge:v:62:y:2017:i:c:p:8-19. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/journal-of-transport-geography .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.