How much do users value a network expansion? Evidence from the public transit system in Singapore

• Main Authors: FESSELMEYER, Eric, LIU, Haoming
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2018
• Subjects: Public transportation; Housing; Network effects; Transportation; Urban Studies and Planning
• Online Access: https://ink.library.smu.edu.sg/cis_research_all/4; https://ink.library.smu.edu.sg/context/cis_research_all/article/1003/viewcontent/1_s2.0_S0166046217304374_main.pdf
• Institution: Singapore Management University

We estimate the network effects of a public transit system by examining the impact of its expansion on housing prices. 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 1.8% 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$455 million in aggregate, which is equivalent to 9% of the estimated S$5 billion cost of the expansion.