An integrated causal framework to evaluate uplift value with an example on change in public transport supply

Abstract

Many empirical applications aim to isolate the impact of implementing new public transport on real estate uplift value. While their conclusions generally point to positive impact, due to reduction in transportation cost, the methodological framework to investigate uplift value has largely evolved over time. This paper reviews the different methodological challenges in measuring causal uplift value and proposes an adjusted parametric approach inspired from the Alonso-Muth-Mills model, returning a complex 2-D price premium function allowing for spatial heterogeneous patterns of the average treatment effect. The proposed framework also accounts for other methodological challenges underlined by literature such as spatial autocorrelation, selectivity and representativity issues, and possible anticipation effects. To illustrate the importance of methodological choices on estimation results, the framework is applied to the case of the implementation of a bus rapid transit (BRT) system in Québec City, a medium-size Canadian city, as a specific case study.