The anticipation effect of a light rail transit line on housing prices in the Helsinki region
Keywords:anticipation effect, difference-in-differences, housing market, light rail transit
AbstractI analyze how housing markets in Espoo and Helsinki anticipate the construction of a new light rail transit connection called Jokeri Light Rail. I use geocoded micro-level housing transaction data from 2003–2019. As an econometric identiﬁcation strategy, I utilize difference-in-differences estimation with a hedonic price model. My main result is that, on average, apartment prices increase by 5 percent more within 800 meters of the Jokeri Light Rail stops than apartments farther away. A rough estimate of the total windfall for homeowners indicates that the anticipated beneﬁts exceed the cost estimate for the investment ﬁve to eight years before the Jokeri Light Rail becomes operational.
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