Does Plan matter in China? Effects from transport improvement on land prices

Over 140 billion CNY (1GBP=10CNY) has been spent between 2000 and 2012 in Beijing on the construction of new rail transit lines. Such massive investment allows me to examine the consequences of transport improvement for land prices nearby new stations. Conventional hedonic techniques for valuing rail access mask the changing nature of geographical links between land parcels and stations induced by rail transit expansions. This paper improves on previous literature by applying a spatial multi-intervention difference-in-difference approach to estimate the heterogeneity in the capitalization effects of rail transit development for residential land uses in Beijing. The results show that residential land parcels that receive increased station proximity experience appreciable price premiums, but the relative importance of such benefits varies over space. These findings lend to support the evidence that public investment has an essential role to play in spurring the spatially targeted land market and provide implications for further land and transport policy making in China.