Measuring transit accessibility benefits and their implications on land value capture: a case study of the Bangkok Metropolitan Region

Abstract

Infrastructure investments have long been a key factor driving the economic and urban development of a country. These investments usually require a large amount of funds, but funding for such investments is often limited to catching up with the growing urban population, especially for cities in emerging economies. As a result, finding alternative funding for infrastructure investment is increasingly important. Land value capture (LVC) is one of the mechanisms that can be used to fund infrastructure investment. An important policy question for the land value capture is determining how much of the increment land values are due to infrastructure investment. This research aims to assess the land value increment due to proximity to public transit, using Bangkok as a case study. The analysis employs hedonic regressions of low-rise residential real estate projects from 2009 to 2017 in the Bangkok Metropolitan Region. The results suggest that the proximity to the nearest mass transit stations has driven up the land values of residential lands in real estate development projects. In addition, the bid-rent coefficients over time have increased in magnitude in the latter years as more transit stations have opened, suggesting the presence of temporal effects from various stages of mass transit investments on land values. The analysis also assesses the value that can be captured through a tax-based LVC mechanism around a new mass transit station.