Ease vs. Noise: Long-Run Changes in the Value of Transport (Dis)Amenities
100 Pages Posted: 30 Jul 2019
Date Written: June 2019
For a complete cost-benefit analysis of durable infrastructures, it is important to understand how the value of non-market goods such as transit time and environmental quality changes as incomes rise in the long-run. We use difference-in-differences and spatial differencing to estimate the land price capitalization effects of metro rail in Berlin, Germany today and a century ago. Over this period, the negative effect of rail noise tripled in percentage terms. Our results imply long-run income elasticities of the value of noise reduction and transport access of 2.2 and 1.4, substantially exceeding cross-sectional contingent valuation estimates.
Keywords: accessibility, Difference-in-Differences, income elasticity, land price, noise, Spatial differencing
JEL Classification: N73, N74, R12, R14, R41
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