Disamenties of Living Close to Transit Tracks: Evidence from Singapore

Abstract

Urban transit systems bring social and economic benefits but generate disamenities to residents who live close to transit tracks. This paper empirically estimates the real costs of noise disamenities generated from mass rapid transit (MRT) tracks on public housing prices in Singapore. We use the aboveground and underground rail tracks in our identification strategy and find that noise disamenities from MRT trains cause a depreciation of approximately 3% to 4% in public housing prices for every 1 km reduction in the distance to the MRT rail tracks. Singapore’s government erects noise barriers along selected segments of the MRT tracks to mitigate noise. Difference-in-differences (DID) tests on the policy shock show that housing prices increase by approximately 2% and 4% after the announcement and completion of noise barrier projects, respectively. The welfare gains of the project to public housing residents are estimated at approximately 700 million Singapore dollars.