Effect of Distance to Train Station and Mobile Coverage on Land Value: A Case of Tax Valuation in Oreamuno, Costa Rica

Abstract

Abstract In Costa Rica, a land tax valuation model provided by the Technical Standardization Body (ONT) of the Ministry of Finance is used. This model considers homogeneous areas that include properties with similar characteristics and review factors that have not been recently updated. The objective of this article is to determine the effect of the distance to the train station and mobile coverage on the value of land in Oreamuno, Costa Rica, as a proposal to be included in the mass valuation model of the ONT. A multiple regression econometric model was used to establish the functional relationship between the value of the property and its characteristics, through the Ordinary Least Squares (OLS) method, using 10 variables applied to 200 references initially. The results allow demonstrating that other variables such as “Distance to the train station” and “Mobile coverage” are representative for determining the value of properties, in addition to those commonly used by the ONT model. The research allows concluding that the land valuation models should be updated periodically and should include variables related to improvements in technology and access roads, since these increase the market value of properties and improve the social development of localities in study.