The Effect of Transportation Improvements on the Separate Values of Land and Buildings

23 Pages Posted: 24 Aug 2017

See all articles by T. Nicolaus Tideman

T. Nicolaus Tideman

Virginia Polytechnic Institute & State University - Department of Economics

Florenz Plassmann

SUNY at Binghamton, Department of Economics

Date Written: August 23, 2017

Abstract

Transportation improvements tend to raise property values. But how do they affect the two components of property value, land and buildings? We develop a simple model to show that transportation improvements that raise the value of land generally lower the value of existing buildings. Our model provides intuitive explanations for several recent findings in the empirical urban economics literature.

Keywords: Transportation Improvement, Land Value, Building Value, Residual

JEL Classification: R14, R41, R52

Suggested Citation

Tideman, T. Nicolaus and Plassmann, Florenz, The Effect of Transportation Improvements on the Separate Values of Land and Buildings (August 23, 2017). Available at SSRN: https://ssrn.com/abstract=3025058 or http://dx.doi.org/10.2139/ssrn.3025058

T. Nicolaus Tideman

Virginia Polytechnic Institute & State University - Department of Economics ( email )

3021 Pamplin Hall
Blacksburg, VA 24061
United States

Florenz Plassmann (Contact Author)

SUNY at Binghamton, Department of Economics ( email )

Binghamton, NY 13902-6000
United States
607-777-4304 (Phone)

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