BRT system in Bogotá and urban effects: More residential land premiums?

Abstract

Abstract The possible impact of Bus Rapid Transit (BRT) systems on land values remains the source of an interesting debate. Using a matching method known as Coarsened Exact Matching (CEM) in combination with detailed cross-sectional cadastral data, this study assesses the effects of Bogota’s BRT infrastructure on residential land value, as well as effect heterogeneity according to socioeconomic characteristics, location and physical configurations of neighborhoods. Our results show that in low-income neighborhoods BRT has a positive effect on land value, likely because the benefits of proximity outweigh any inconvenience. In contrast, in medium- and high-income neighborhoods, the effect of BRT infrastructure on land value is not significant and, in some cases, even negative. The results are relevant for the debate on BRT impacts on residential land value and land value capture, especially now that the construction of a new BRT trunk line in the city is about to begin. The effects of BRT on the value of land can be regarded as positive (or negative) economic externalities of these types of projects.