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How Do Users Value a Network Expansion? Evidence from the Public Transit System in Singapore

Eric Fesselmeyer () and Haoming Liu ()

No 10142, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We estimate the network externality of a public transit system by examining the effects of its expansion on the housing market. Our results show that a major expansion of Singapore's Mass Rapid Transit (MRT) system increased the price of apartments within 0.5 km of a pre-expansion station by 1.6% to 2.1% relative to apartments that were further away from a station. Evaluated at the mean housing price, the expansion increased the value of pre-connected apartments by at least S$386 million, which is equivalent to about 8% of the estimated S$5 billion cost of the expansion.

Keywords: public transportation; housing; network effects (search for similar items in EconPapers)
JEL-codes: H4 R21 R42 H23 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2016-08
New Economics Papers: this item is included in nep-net, nep-reg, nep-sea, nep-tre and nep-ure
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