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Transport and Land-Use Benefits under Location Externalities

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  • Francisco Martínez
  • Claudio Araya

Abstract

Transport projects are economically assessed partly by estimating users' benefits in the transport system and by ignoring impacts on land use under the argument that these benefits are already incorporated into transport users' benefits. In this paper we discuss this argument from two main viewpoints: the level of percolation of transport benefits into land values and the presence of external economies in urban systems. We first propose and discuss measures of benefits in the transport system and in the land-use system. Then we analyse to what extent transport users' benefits percolate into land rents, showing empirical evidence that it may be limited. We then focus on the less-studied effect of three types of technological externalities: direct effects associated with traffic nuisance; location externalities, associated with economies of agglomeration of households and firms, which in some cities may be a dominant location choice factor; and land-use–transport interaction. We conclude by specifying in more detail the conditions under which the classical argument and current project appraisal methods are valid.

Suggested Citation

  • Francisco Martínez & Claudio Araya, 2000. "Transport and Land-Use Benefits under Location Externalities," Environment and Planning A, , vol. 32(9), pages 1611-1624, September.
    • Handle: RePEc:sae:envira:v:32:y:2000:i:9:p:1611-1624
    DOI: 10.1068/a32131
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    References listed on IDEAS

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    1. Sasaki, Komei & Kaiyama, Michihiro, 1990. "The effects of urban transportation costs on urban spatial structure with endogenous wage income," Regional Science and Urban Economics, Elsevier, vol. 20(2), pages 223-243, September.
    2. Herbert Mohring, 1961. "Land Values and the Measurement of Highway Benefits," Journal of Political Economy, University of Chicago Press, vol. 69(3), pages 236-236.
    3. Wheaton, William C, 1977. "Residential Decentralization, Land Rents, and the Benefits of Urban Transportation Investment," American Economic Review, American Economic Association, vol. 67(2), pages 138-143, March.
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    Cited by:

    1. Börjesson, Maria & Jonsson , Daniel & Berglund, Svante & Almström , Peter, 2013. "Land-use impacts in transport appraisal," Working papers in Transport Economics 2013:32, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
    2. Huai, Yue & Lo, Hong K. & Ng, Ka Fai, 2021. "Monocentric versus polycentric urban structure: Case study in Hong Kong," Transportation Research Part A: Policy and Practice, Elsevier, vol. 151(C), pages 99-118.
    3. Peter Mackie & John Nellthorp & James Laird, 2005. "Treatment of Induced Traffic," World Bank Publications - Reports 11796, The World Bank Group.
    4. Laird, James J. & Venables, Anthony J., 2017. "Transport investment and economic performance: A framework for project appraisal," Transport Policy, Elsevier, vol. 56(C), pages 1-11.
    5. Ma, Xiaosu & Lo, Hong K., 2012. "Modeling transport management and land use over time," Transportation Research Part B: Methodological, Elsevier, vol. 46(6), pages 687-709.
    6. Rodríguez, Daniel A. & Mojica, Carlos H., 2009. "Capitalization of BRT network expansions effects into prices of non-expansion areas," Transportation Research Part A: Policy and Practice, Elsevier, vol. 43(5), pages 560-571, June.
    7. Niehaus, Markus & Galilea, Patricia & Hurtubia, Ricardo, 2016. "Accessibility and equity: An approach for wider transport project assessment in Chile," Research in Transportation Economics, Elsevier, vol. 59(C), pages 412-422.
    8. Eda Ustaoglu & Brendan Williams & Laura O. Petrov & Harutyun Shahumyan & Hedwig Van Delden, 2017. "Developing and Assessing Alternative Land-Use Scenarios from the MOLAND Model: A Scenario-Based Impact Analysis Approach for the Evaluation of Rapid Rail Provisions and Urban Development in the Greate," Sustainability, MDPI, vol. 10(1), pages 1-34, December.
    9. Hui Sun & Yuning Wang & Qingbo Li, 2016. "The Impact of Subway Lines on Residential Property Values in Tianjin: An Empirical Study Based on Hedonic Pricing Model," Discrete Dynamics in Nature and Society, Hindawi, vol. 2016, pages 1-10, September.
    10. Börjesson, Maria & Jonsson, R. Daniel & Berglund, Svante & Almström, Peter, 2014. "Land-use impacts in transport appraisal," Research in Transportation Economics, Elsevier, vol. 47(C), pages 82-91.

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