The Impact of a Mass Rapid Transit System on Residential Property Values: The Case of Kaohsiung, Taiwan

Lecture | March 1 | 4-5 p.m. | 502 Davis Hall

Speaker/Performer: Jean-Daniel Saphores, Ph.D., Associate Professor of Civil and Environmental Engineering, University of California, Irvine

Sponsor: Institute of Transportation Studies

The construction of a public transit system in a large metropolitan area can relieve congestion, enhance mobility, and improve air quality. In a well-functioning housing market, these benefits will be reflected in housing prices. In this paper, we analyze transactions of apartments with elevators from 2007 and 2009 in Kaohsiung (Taiwan’s second largest city) to capture the impact of the opening in 2008 of a new mass rapid transit (MRT) system. Our data includes time on market information (TOM) so we integrate two-stage least-squares in a geographically weighted regression model to tackle the joint determination of price and TOM while allowing for spatial non-stationarity. We find evidence of spatial non-stationarity but accounting for TOM has a negligible impact on our results. Moreover, the opening of the MRT had a statistically significant and positive impact on the value of apartments with elevators, although the value of this MRT was (surprisingly) not fully capitalized in the housing market in 2007.

Event Contact: rui.wang@berkeley.edu

Document (PDF): Jean-Daniel Saphores