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Subway capitalization effect in Beijing: Theory and evidence on the variation of the subway proximity premium
Author(s) -
Wang Xiyan Jamie
Publication year - 2017
Publication title -
papers in regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.937
H-Index - 64
eISSN - 1435-5957
pISSN - 1056-8190
DOI - 10.1111/pirs.12203
Subject(s) - capitalization , beijing , neighbourhood (mathematics) , hedonic pricing , property value , central business district , house price , capitalization rate , central city , demographic economics , geography , business , agricultural economics , economics , transport engineering , econometrics , economic geography , finance , mathematics , engineering , real estate , philosophy , linguistics , archaeology , china , mathematical analysis , real estate investment trust
This paper analyses the relationship between community attributes and the subway home‐price capitalization effect, asking whether the magnitude of the subway proximity premium is affected by neighbourhood economic status and location. Using longitudinal data from Beijing, the paper estimates that decreasing a community's distance to a subway station by 10 per cent increases the housing price per square metre by 0.2 per cent ~ 0.9 per cent. The paper also shows that, subway capitalization effect is around 0.1 per cent ~ 0.2 per cent lower for communities that have higher quality and charge a 1 Yuan higher property management fee. Moreover, the analysis also reveals that the subway capitalization will decrease by around 0.08 per cent as a community's distance to the central business district (CBD) increases by 1 km.