The City at your Wheels: Citizens Appraisal of Urban Highways in Santiago
Katiza Mitrovic Sesnic
Tesis, Magíster en Economía, IE-PUC, 2019
Abstract: Transportation infrastructure influences individuals’ housing, employment, and educational decisions, among others, and in this manner, it modifies a city’s configuration. The present study aims to understand the citizens’ appraisal of those changes generated by new transportation infrastructure. In particular, we aim to quantify the value that new urban highways create for families that live in their surrounding areas. We use a hedonic price model, focusing on changes in housing prices as indicators of net value gains that people derive from properties (and their locations). Using panel data on property transactions from 2007 to 2018, we estimate the relationship of proximity to a highway and housing prices, for one of the most prominent newly constructed urban highways in Santiago: Acceso Sur. Following the urban economics literature, we use a difference-in-difference approach that compares the price evolution of dwells located near this motorway and those further away. This quasi-experimental technique permits a causal interpretation of the estimates. In contrast to previous estimates of urban highway’s impact on property prices, this work finds a negative effect (5-10% decrease in prices), implying a net value loss for residents living around this kind of infrastructure. The detrimental effect covers a wide area (6-8 km), its intensity diminishes with distance, and it persists over the 8-year post-treatment study period. Mechanisms are explored to reconcile these findings with transportation economics and urban economics models. A decrease in local connectivity, combined with households not experiencing a de facto improvement on their city-wide accessibility, explain the negative value given to this new transport infrastructure.