Time Savings vs. Access-Based Benefit Assessment of New York’s Second Avenue Subway
Yadi Wang and
David Levinson
Journal of Benefit-Cost Analysis, 2022, vol. 13, issue 1, 120-147
Abstract:
Under the current practice of benefit-cost analysis, the direct economic benefits produced by a newly built transit facility are assessed based on how it affects travel time and various costs that are associated with transport needs and travel behavior. However, the time-saving-based benefit calculation approach has been questioned and criticized. Given the strong correlation between accessibility and land value, we propose the access-based land value benefit assessment as an alternative, and apply this assessment method to analyzing the Second Avenue Subway project in Manhattan, New York. The primary principle of the access-based method is that the economic value of a transport project’s intangible gains is largely capitalized by nearby properties’ value appreciation, which is directly caused by improved transport accessibility. We find that: (i) the actual travel time saving is lower than originally forecast; (ii) a strong positive correlation between residential property value and job accessibility by transit is observed; (iii) the appreciation in sold property value and rented property value both far exceed total project cost; and (iv) such results support the decision to approve and construct the Second Avenue Subway.
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:cup:jbcoan:v:13:y:2022:i:1:p:120-147_7
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