Abstract
This paper estimates the effect of highways on land prices using the implementation of the west branch of a large beltway around Sao Paulo Metropolitan Area. This is a unique opportunity since the beltway is being implemented by branches. So, it is possible to use the zones surrounding the branches where construction has actually started as a treatment group to be compared with zones surrounding branches for which construction has not started yet. Since we have a proxy for land price data before and after construction, it is possible to estimate the impact by difference-in-difference. The evidence is that there are significant and asymmetrical effects caused by the highway construction. Parcels located close to ramps outbound of the track observed an increase in price faster than similar zones close to other (planned) branches. For parcels located inbound of the beltway, relatively far from the track (between 2.5 km and 5 km), the effects of construction and delivery/operation faced a (relative) decline in land prices. These results have consequences for transportation finance; betterment levies and value capture taxes; and welfare.
Highlights
The purpose of this paper is to evaluate the effects of the announcement and construction of a large beltway (Rodoanel) around São Paulo Metropolitan Area (SPMA) on land prices
According to Wheaton (1977), one must take into account benefits and costs of road investments, which include more than the direct effects
Urban economic theory states that, coeteris paribus, land value will be higher in locations that are more accessible to Central Business Districts (CBD) or other employment destinations
Summary
The purpose of this paper is to evaluate the effects of the announcement and construction of a large beltway (Rodoanel) around São Paulo Metropolitan Area (SPMA) on land prices. One way to do that is to evaluating the impacts on land prices. This kind of study can shed light on several planning and urban policy questions, as pointed by Bouarnet & Charlermpong (2001). In order to test this hypothesis we choose Rodoanel which is the greatest road investment in the state of São Paulo. Rodoanel is a beltway around the city of São Paulo which surrounds its metropolitan area. In this paper we estimate the impact of Rodanel announcement and construction on residential land prices a posteriori
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