Transport Mode and the Value of Accessibility–A Potential Input for Sustainable Investment Analysis

Abstract

Accessibility plays an essential role in determining real estate prices and land use. An understanding of how accessibility and changes in accessibility influence real estate prices is key to making decisions regarding investments in infrastructure projects. From an accessibility point of view, it is not clear that there should be differences in valuation depending on the mode of public transport, road, or rail. There are, however, other differences that may affect real estate prices differently. For example, railway stations more often than bus stations, tend to be associated with a higher level of service. In addition, an investment in a railway station may signal a long-term decision from the policymaker. A third possible explanation concerns differences in perceived safety, comfort, and security. This paper aims to study if and how capitalization of accessibility differs between modes of transportation. The findings indicate that rail has a higher impact, both for single-family and multifamily houses. The implication of these findings may be of importance for future infrastructure investments and their corresponding cost-benefit analyses. Incorrect valuations of the benefits of infrastructure investments may result in sub-optimal investments.