A Data-Driven Analysis on the Impact of High-Speed Rails on Land Prices in Taiwan

Abstract

High-speed rail (HSR) networks boost inter-city accessibility across a country and stimulate economic growth in inner cities. These economic gains, however, can often be accompanied by sharp increases in land and property prices along the lines that raise governmental concerns. This study examined the effect of the introduction of HSR on land prices in Taiwan and how the extent of such an effect varied with the stages of economic, societal, and infrastructural developments in different cities in Taiwan. Based on extensive published data, an empirical study was conducted using an integrated methodology comprising system dynamics, multivariate regression, and principal component analysis to examine the interacting relationships between the presence of HSR transportation and other important dimensions of city development in determining land prices. The study found that while land prices correlated with the greater locational accessibility brought about HSR, the extent of land price increases depended significantly on economic, societal, and infrastructural considerations such as the unemployment rate, risk-free interest rate, population density, and the existence of free trade zones, etc. This understanding of system behavior will be helpful for policy makers in devising ways to curb the escalation of property price while enjoying the benefits of HSR.