What impact does an announcement of a proposed quarry road have on property values? Evidence from Queensland Australia

The paper investigates the relationship between the announcement of a proposed haul route and its impact on nearby property values. A large number of studies have been conducted using hedonic property value models to show the impact of environmental disamenities on property values, but to our knowledge this is the first time that evidence is provided on the impact of an announcement of a proposed road on property values. For this purpose a hedonic model is used which includes a vector of structural and neighbourhood characteristics and a vector of environmental attributes as explanatory variables. The value of the property is the dependent variable which has been adjusted for inflation. For this purpose real estate data, as well as secondary data from the Australian Bureau of Statistics, are used. The results of the regression analysis suggest that the marginal willingness to pay to be farther from the proposed road route is 4.92 per cent per kilometre. In monetary terms, this is quite a significant amount. The distance variable is significant at the 10 per cent level. Other significant factors that influence house prices are number of bathrooms, number of bedrooms, size of the land, unimproved capital value, distance to the nearest park and year of sale. The results of the study have important implications for policy decision-making.