Changes in land value due to road development

Abstract

One of the important rules in transportation economics is to present a cost–benefit analysis (CBA) and economic impact analysis individually, not to double-count the cost or benefits and not to add the results together. However, it is important to establish whether these analyses demonstrate similar quantifying impacts or have similar trends. In addition, it is necessary to clarify whether conventional CBA captures all quantifiable benefits. This is a complex task. The study reported in this paper focused on modelling the change in the value of land affected by an inter-urban road. Four independent variables were chosen: distance from the road, land use, land area and the time elapsed since completion of the road works. Using these variables, two models were produced to estimate the percentage change in land value (PCLV). Sensitivity analysis was used to ascertain the most accurate model for predicting the difference in PCLV. This model was tested using data from the UK. The model results were compared with historical data and the comparison demonstrated that the model is accurate at estimating predicted changes in land values.