A new Mass Rapid Transit (MRT) line construction and housing wealth: Evidence from the Circle Line

This study uses the opening of the new Mass Rapid Transit (MRT) in stages between 2010 and 2012 in Singapore as the exogenous event to empirically test the impact of the new Circle Line (CL) on housing wealth. Applying a "differences-in-differences" approach to the non-landed private housing transaction data covering the period from 2009 to 2013, we find that the average housing prices increase by 1.6% in the post-opening of the CL. We find significant capitalization of the new CL into housing prices, especially households living within a 400-meter radius (the treatment zone) from the closest MRT stations on the CL. The treatment effects that are measured by the “marginalwillingness to pay” for houses located within the treatment zone is 13.2% relative to houses located outside the treatment zone. The new CL opening creates an estimated S$1.23 billion housing wealth effects for households living in close proximity to the CL MRT stations. However, we do not find significant "anticipative" effects on house prices in the six-month window prior to the opening of CL. The strongest treatment effect is found after the opening of the phase 1 of CL, and the treatment intensity declines in phases 2 and 3 of the CL opening.

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Housing Wealth Effects: The Long View

The Review of Economic Studies ◽

10.1093/restud/rdaa018 ◽

2020 ◽

Cited By ~ 2

Author(s):

Adam M Guren ◽

Alisdair McKay ◽

Emi Nakamura ◽

Jón Steinsson

Keyword(s):

House Prices ◽

House Price ◽

Ordinary Least Squares ◽

Wealth Effects ◽

Housing Wealth ◽

Income Risk ◽

New Instrument ◽

Housing Wealth Effect ◽

Housing Wealth Effects ◽

Standard Life

Abstract We provide new time-varying estimates of the housing wealth effect back to the 1980s. We use three identification strategies: ordinary least squares with a rich set of controls, the Saiz housing supply elasticity instrument, and a new instrument that exploits systematic differences in city-level exposure to regional house price cycles. All three identification strategies indicate that housing wealth elasticities were if anything slightly smaller in the 2000s than in earlier time periods. This implies that the important role housing played in the boom and bust of the 2000s was due to larger price movements rather than an increase in the sensitivity of consumption to house prices. Full-sample estimates based on our new instrument are smaller than recent estimates, though they remain economically important. We find no significant evidence of a boom–bust asymmetry in the housing wealth elasticity. We show that these empirical results are consistent with the behaviour of the housing wealth elasticity in a standard life-cycle model with borrowing constraints, uninsurable income risk, illiquid housing, and long-term mortgages. In our model, the housing wealth elasticity is relatively insensitive to changes in the distribution of loan-to-value (LTV) for two reasons: first, low-leverage homeowners account for a substantial and stable part of the aggregate housing wealth elasticity; second, a rightward shift in the LTV distribution increases not only the number of highly sensitive constrained agents but also the number of underwater agents whose consumption is insensitive to house prices.

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The Impact of a Mass Rapid Transit System on Neighborhood Housing Prices: An Application of Difference-In-Difference and Spatial Econometrics

Real Estate Management and Valuation ◽

10.2478/remav-2020-0003 ◽

2020 ◽

Vol 28 (1) ◽

pp. 28-40 ◽

Cited By ~ 2

Author(s):

Lee Chun-Chang ◽

Liang Chi-Ming ◽

Hong Hui-Chuan

Keyword(s):

Housing Prices ◽

Urban Traffic ◽

Control Group ◽

Rapid Transit ◽

Difference In Difference ◽

Spatial Error ◽

Transit System ◽

Interaction Variable ◽

The Impact ◽

Mass Rapid Transit

AbstractThis study discusses the impact of the mass rapid transit (MRT) system’s construction and operation on neighborhood housing prices. Estimations were conducted by considering the spatial dependence of housing prices and using a difference-in-difference (DD) method that incorporated the spatial lag model and spatial error model. The empirical results indicated that the coefficient of the interaction variable of the MRT’s range of influence and commencement time of construction was -0.079, reaching the 10% significance level. Hence, when MRT construction began, housing prices in the experimental group decreased by 7.9% as compared to the control group. A possible reason for these findings is that the “dark age” of urban traffic, air pollution, and noise brought about by MRT construction negatively affected housing prices. With regard to MRT operations, the coefficient of the interaction variable of the MRT’s influence range and service commencement time did not reach the level of significance, indicating that housing prices within the MRT’s influence range were not significantly affected when the MRT’s service began. This might be due to the fact that the psychological expectations of the increase in housing prices had already been realized during the planning, announcement, and construction phases.

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House prices and monetary policy

Studies in Nonlinear Dynamics & Econometrics ◽

10.1515/snde-2014-0072 ◽

2016 ◽

Vol 20 (3) ◽

Author(s):

Paulo Brito ◽

Giancarlo Marini ◽

Alessandro Piergallini

Keyword(s):

Monetary Policy ◽

Overlapping Generations ◽

Multiple Equilibria ◽

House Prices ◽

Heteroclinic Orbit ◽

Wealth Effects ◽

Global Dynamics ◽

Housing Wealth ◽

Rational Bubbles ◽

Housing Wealth Effects

AbstractThis paper analyzes global dynamics in an overlapping generations general equilibrium model with housing-wealth effects. It demonstrates that monetary policy cannot burst rational bubbles in the housing market. Under monetary policy rules of the Taylor-type, there exist global self-fulfilling paths of house prices along a heteroclinic orbit connecting multiple equilibria. From bifurcation analysis, the orbit features a boom (bust) in house prices when monetary policy is more (less) active. The paper also proves that booms or busts cannot be ruled out by interest-rate feedback rules responding to both inflation and house prices.

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Has tourism driven house prices in Germany? Time-varying evidence since 1870

Tourism Economics ◽

10.1177/13548166211008832 ◽

2021 ◽

pp. 135481662110088

Author(s):

Sefa Awaworyi Churchill ◽

John Inekwe ◽

Kris Ivanovski

Keyword(s):

World War Ii ◽

Historical Data ◽

House Prices ◽

Housing Prices ◽

Time Varying ◽

Data Set ◽

Time Series Modelling ◽

The Impact ◽

Tourism Flows ◽

Non Parametric

Using a historical data set and recent advances in non-parametric time series modelling, we investigate the nexus between tourism flows and house prices in Germany over nearly 150 years. We use time-varying non-parametric techniques given that historical data tend to exhibit abrupt changes and other forms of non-linearities. Our findings show evidence of a time-varying effect of tourism flows on house prices, although with mixed effects. The pre-World War II time-varying estimates of tourism show both positive and negative effects on house prices. While changes in tourism flows contribute to increasing housing prices over the post-1950 period, this is short-lived, and the effect declines until the mid-1990s. However, we find a positive and significant relationship after 2000, where the impact of tourism on house prices becomes more pronounced in recent years.

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Multiscale Effects of Multimodal Public Facilities Accessibility on Housing Prices Based on MGWR: A Case Study of Wuhan, China

ISPRS International Journal of Geo-Information ◽

10.3390/ijgi11010057 ◽

2022 ◽

Vol 11 (1) ◽

pp. 57

Author(s):

Lingbo Liu ◽

Hanchen Yu ◽

Jie Zhao ◽

Hao Wu ◽

Zhenghong Peng ◽

...

Keyword(s):

Public Service ◽

House Prices ◽

Housing Prices ◽

Positive Influence ◽

Policy Formulation ◽

Public Facility ◽

Factors Affecting ◽

Public Facilities ◽

Geographically Weighted Regression Model ◽

The Impact

The layout of public service facilities and their accessibility are important factors affecting spatial justice. Previous studies have verified the positive influence of public facilities accessibility on house prices; however, the spatial scale of the impact of various public facilities accessibility on house prices is not yet clear. This study takes transportation analysis zone of Wuhan city as the spatial unit, measure the public facilities accessibility of schools, hospitals, green space, and public transit stations with four kinds of accessibility models such as the nearest distance, real time travel cost, kernel density, and two step floating catchment area (2SFCA), and explores the multiscale effect of public services accessibility on house prices with multiscale geographically weighted regression model. The results show that the differentiated scale effect not only exists among different public facility accessibilities, but also exists in different accessibility models of the same sort of facility. The article also suggests that different facilities should adopt its appropriate accessibility model. This study provides insights into spatial heterogeneity of urban public service facilities accessibility, which will benefit decision making in equal accessibility planning and policy formulation for the layout of urban service facilities.

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