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The value capture potential of the Lisbon Subway

Author

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  • Martínez, Luis Miguel Garrido

    (Instituto Superior Técnico, Lisbon)

  • Viegas, José Manuel

    (Instituto Superior Técnico, Lisbon)

Abstract

This paper tries to build on traditional value capture measures, to estimate the potential of application of some of these mechanisms to the Lisbon subway, examining their ability to contribute to cover the financial costs of the system operation and development. The study will just focus on the municipality of Lisbon where this system mainly operates. This research uses spatial hedonic pricing models of the real estate of the region, calibrated on previous stages of the study, to asses, to which extent, transportation infrastructure is currently capitalised into the real estate market. The paper uses a Monte Carlo simulation procedure to estimate a synthetic population of residential and non residential properties that matches the census blocks statistics, allowing, measuring the subway valuation for each synthetic property and aggregate the results for the whole municipality. This potential value capture estimate is then used to estimate an annual tax that could be charged under different value capture measures configurations (i.e. land value tax, special assessment). The results suggest that there is a significant potential of the use of this instrument to finance the subway infrastructure.

Suggested Citation

  • Martínez, Luis Miguel Garrido & Viegas, José Manuel, 2012. "The value capture potential of the Lisbon Subway," The Journal of Transport and Land Use, Center for Transportation Studies, University of Minnesota, vol. 5(1), pages 65-82.
    • Handle: RePEc:ris:jtralu:0077
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    References listed on IDEAS

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    3. Aisling J. Reynolds-Feighan & Joan Durkan & Joe Durkan, 2000. "Comparison of subvention levels for public transport systems in European cities," Open Access publications 10197/124, School of Economics, University College Dublin.
    4. Oates, Wallace E, 1969. "The Effects of Property Taxes and Local Public Spending on Property Values: An Empirical Study of Tax Capitalization and the Tiebout Hypothesis," Journal of Political Economy, University of Chicago Press, vol. 77(6), pages 957-971, Nov./Dec..
    5. John D. Benjamin & G. Stacy Sirmans, 1996. "Mass Transportation, Apartment Rent and Property Values," Journal of Real Estate Research, American Real Estate Society, vol. 12(1), pages 1-8.
    6. Robert Cervero & Bambang Susantono, 1999. "Rent Capitalization and Transportation Infrastructure Development in Jakarta," Review of Urban & Regional Development Studies, Wiley Blackwell, vol. 11(1), pages 11-23, March.
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    Cited by:

    1. Levinson, David & Zhao, Zhirong Jerry, 2012. "Introduction to the special issue on value capture for transportation finance," The Journal of Transport and Land Use, Center for Transportation Studies, University of Minnesota, vol. 5(1), pages 1-3.
    2. Mi Diao, 2015. "Selectivity, spatial autocorrelation and the valuation of transit accessibility," Urban Studies, Urban Studies Journal Limited, vol. 52(1), pages 159-177, January.
    3. Olaru, Doina & Mulley, Corinne & Smith, Brett & Ma, Liang, 2017. "Policy-led selection of the most appropriate empirical model to estimate hedonic prices in the residential market," Journal of Transport Geography, Elsevier, vol. 62(C), pages 213-228.

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    More about this item

    Keywords

    Value capture; Transport financing; Fiscal simulation; Real estate hedonic price models; Subways; Lisbon;
    All these keywords.

    JEL classification:

    • R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General

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