The Economic Effects of Opening a New Subway Line on City Center Commercial District

Abstract

This study forecasted the economic effects that the new Fukuoka City Subway Nanakuma Line would induce on the city center retail sector. The subway will connect the suburban residential area to the city center. Suburban residents can drastically reduce their travel time to the city center from 40 or 50 to 20 min by changing from bus to subway. This improvement in accessibility should increase the frequency of visits to the city center so that the number of visitors and the turnover at the city center would increase. This increase of the turnover was defined and estimated as the economic effects of the new subway on the city center retail sector. We called this procedure a consumer behavior approach because all estimations depend on behavioral changes in consumers after the subway is introduced. First we estimated the modal choice and visit frequency models from the data obtained from a survey of consumer travel behavior conducted at the city center for randomly sampled visitors. We predicted modal choice, frequency of visits, and expenditure at the city center by residents for each 278 residential divisions along the subway line and summed the results. The economic effects were estimated to be 17.7 billion yen per year.