The relationship between property values and railroad proximity: a study based on hedonic prices and real estate brokers' appraisals

We study the relationship between the price of residential property value a nd proximity to railroads in Oslo, by two different methods, namely a) thro ugh a hedonic price study where the statistical relationship between proper ty prices and railroad proximity is estimated, and b) through a multi-attri bute utility investigation of real estate agents' evaluation of such a rela tionship. We find in both cases that there are strong effects of proximity to railroad lines on property prices, at distances less than 100 meters fro m the lines. In the statistical study log-linear relationships fit the data best, and our estimates indicate that a doubling of the distance from the railroad line, within a 100 meter bound, increases the property price by ab out 10%. With real estate agents only a linear relationship is probed. This yields an increase in the price of an average relevant housing unit by abo ut 182,000 NOK, due to a increase in the distance to a railroad track from 20 to 100 meters. The equivalent figure from the statistical study is in th e range 120-150,000 NOK. The two figures are thus of the same magnitude.