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Negative Externalities of Rail Noise and Housing Values: Evidence from the Cessation of Railway Operations in Singapore
Author(s) -
Diao Mi,
Qin Yu,
Sing Tien Foo
Publication year - 2015
Publication title -
real estate economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.064
H-Index - 61
eISSN - 1540-6229
pISSN - 1080-8620
DOI - 10.1111/1540-6229.12123
Subject(s) - externality , real estate , noise (video) , economics , government (linguistics) , estate , business , central business district , transport engineering , finance , engineering , microeconomics , computer science , linguistics , philosophy , artificial intelligence , image (mathematics)
The governments of Malaysia and Singapore reached a landmark agreement in May 2010 to end the operations of nearly 80‐year‐old railway lines and stations in Singapore. In our study, the cessation of the railway services operated by Keretapi Tanah Malaya (KTM), a firm owned by the Malaysian government, with effect from July 1, 2011 is used in a quasi‐experiment design to test the effects of the removal of train noise externalities on real estate values. Based on the nonlanded private housing transactions data from January 2005 to June 2013, we find that average prices for houses located within a 400‐m boundary from the railway lines increased by 3.5% relative to prices for houses located outside the 400‐m boundary after the cessation agreement has been announced. The removal of train noise externalities increases housing prices in the affected area by 13.7% on average in the postcessation period of the KTM railway services. Realized economic benefits associated with the railway services cessation were estimated at S$0.36 billion based on houses sold in the post cessation period of the KTM railway services.