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Discussion Paper Details

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Title: Ease vs. noise: Long-run changes in the value of transport (dis)amenities

Author(s): Gabriel Ahlfeldt, Volker Nitsch and Nicolai Wendland

Publication Date: June 2019

Keyword(s): accessibility, Difference-in-Differences, income elasticity, land price, noise and Spatial differencing

Programme Area(s): Economic History and International Trade and Regional Economics

Abstract: For a complete cost-benefit analysis of durable infrastructures, it is important to understand how the value of non-market goods such as transit time and environmental quality changes as incomes rise in the long-run. We use difference-in-differences and spatial differencing to estimate the land price capitalization effects of metro rail in Berlin, Germany today and a century ago. Over this period, the negative effect of rail noise tripled in percentage terms. Our results imply long-run income elasticities of the value of noise reduction and transport access of 2.2 and 1.4, substantially exceeding cross-sectional contingent valuation estimates.

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Bibliographic Reference

Ahlfeldt, G, Nitsch, V and Wendland, N. 2019. 'Ease vs. noise: Long-run changes in the value of transport (dis)amenities'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=13811