Abstract
Most existing studies empirically investigated the impact of rail transit on housing prices using the traditional hedonic price model, which is based on ordinary least squares (OLS). This method can estimate only the average implicit prices of housing characteristics and may ignore possible heterogeneous impacts of rail transit at different housing price levels. As a useful supplement to OLS regression, quantile regression can measure how implicit prices of explanatory variables vary across different price levels, thereby providing a comprehensive picture of the relationship between housing characteristics and prices. By using Hangzhou, China as an example, this study adopts the traditional hedonic price model and quantile regression model to investigate the capitalization effect of a new subway line on housing prices. Empirical results suggest the significant impacts of accessibility to subway stations. The average housing price within 2 km of the station is 2.1% to 6.1% higher than those outside. We also find that the impacts of the subway differ significantly across the distribution of housing prices, wherein the absolute value of estimated coefficients increased from 0.023 for the 15th quantile to 0.086 for the 95th quantile. The subway opening strengthens the capitalization effect of traffic accessibility. The absolute value of price elasticity increases from 0.044 to 0.053, and the range of influence is expanded from 1500 m to 2000 m.
Highlights
The development of the urban rail transit system has been thriving over the last decade, and many cities in China adopted the urban rail transit system as their main transport mode
This study focuses on the capitalization effect of Hangzhou Subway Line 1 on housing prices during its construction and operation phases
To overcome the limitations of ordinary least squares (OLS) regression, Models 7–12 use quantile regression to examine the impact of Subway Line 1 for different quantiles of housing price distribution
Summary
The development of the urban rail transit system has been thriving over the last decade, and many cities in China adopted the urban rail transit system as their main transport mode. The average housing price appreciated, in real terms, by at least 10% every year between 1999 to 2010, outpacing the growth rate of many western countries even during their property heyday, which is called the ‘Hangzhou Phenomenon’ and has attracted widespread attention from scholars Another feature of the Hangzhou is that Subway Line 1, which began construction on 28 March 2007 and opened on 24 November 2012, is the first rail transit service and the main line of the urban rail network in Hangzhou. We employ the quantile regression technique to investigate the heterogeneous impacts of subway accessibility at different housing price levels and provide new evidence, unlike those presented in existing literature. The fourth part provides the empirical results, and the fifth presents the conclusion
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