The impact of railway networks on residential land values within transit-oriented development areas

The transit-oriented development (TOD) is expected to bring externalities, one of which is indirectly affecting the residential land values within the area. In Tokyo and its suburbs where people are heavily dependent on train networks, some station-area neighborhoods and railway lines operated by different railway companies may have intrinsic values, caused by either the quality and service of each neighborhood and line or other, unobservable traits. In this paper, the effects of TOD characteristics and different railway lines on residential land values are analyzed by utilizing the multiple membership multilevel model. The empirical result emphasizes three things. First, several TOD factors significantly affect residential land value. Second, differences across railway lines are responsible for creating a large share of land value variations. Third, the effects are the largest for the lines serving areas south to west of Tokyo in comparison with other selected railway lines.