Bus stop, property price and land value tax: A multilevel hedonic analysis with quantile calibration. (January 2015) - Wang, Yiming
Highlights: Identifying a positive correlation between public transport infrastructure and private land value. Finding expensive properties to benefit more from spatial adjacency to public transport. Offering empirical evidence in support of progressive land value taxation. Abstract: Based on a multilevel and quantile hedonic analysis regarding the local public bus system and the prices of residential properties in Cardiff, Wales, we find strong evidence to support two research hypotheses: (a) the number of bus stops within walking distance (300–1500 m) to a property is positively associated with the property's observed sale price, and (b) properties of higher market prices, compared with their cheaper counterparts, tend to benefit more from spatial proximity to the bus stop locations. Given these statistical findings, we argue that, land value tax (LVT), albeit a classic political idea dating back to the early 20th century, does have contemporary relevance and, with modern geographic information technologies, can be rigorously analysed and empirically justified with a view to actual implementation. Levying LVT will not only generate additional fiscal revenues to help finance the development and maintenance of local public infrastructures, but will also ensure a more just distribution of the economic welfare yielded by public investment.