Prague Economic Papers 2023, 32(1):84-106 | DOI: 10.18267/j.pep.823

Are the Effects of Opening New Mass Rapid Transit Segments in Taiwan on Nearby Housing Prices Positive?

Ming-Te Lee ORCID...a, Ming-Long Lee ORCID...b, Ya-Ting Chengc
a Department of Accounting, Ming Chuan University, Taipei, Taiwan
b Department of Finance, National Dong Hwa University, Hualien, Taiwan
c Mega International Commercial Bank, Taipei, Taiwan

This study evaluates the effects of opening new segments of mass rapid transit (MRT) lines on housing prices near the MRT stations in Tucheng District and Xinzhuang District, New Taipei City, Taiwan. The effect of proximity to each MRT station is estimated separately with difference-in-differences regressions integrated with spatial econometrics with heteroscedasticity-robust standard errors. The opening of the new segment of the Blue Line, also known as Bannan Line of the Taipei Metro, does not significantly influence housing prices within 600-metre road network distance of the MRT stations, compared to prices outside the distance range. In contrast, and also unlike the findings of prior studies, although the segment and the stations are underground structures, the opening of the new segment of the Orange Line, also known as the Zhonghe-Xinlu Line of the Taipei Metro, significantly decreases housing prices within 600-metre road network distance of the MRT stations, compared to prices outside the distance range, perhaps because the opening of the stations is delayed about one and a half years to be used as a temporary storage area for MRT trains. The findings have implications for homebuyers, investors, mortgage lending institutions and tax assessment authorities.

Keywords: Hedonic pricing model, housing price, mass rapid transit, public transport, spatial regression
JEL classification: C21, G21, H20, R31, R40

Received: May 22, 2022; Revised: November 17, 2022; Accepted: January 26, 2023; Published: March 9, 2023  Show citation

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Ming-Te, L., Ming-Long, L., & Cheng, Y. (2023). Are the Effects of Opening New Mass Rapid Transit Segments in Taiwan on Nearby Housing Prices Positive? Prague Economic Papers, 32(1), 84-106. doi: 10.18267/j.pep.823
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