SPATIAL ECONOMETRICS: SUSTAINABLE URBAN DEVELOPMENT - TRANSPORT INFRASTRUCTURE DEVELOPMENT AND REAL-ESTATE VALUES

Purpose: M4 metro line has been the biggest transport infrastructure project in Budapest in the past decades. Taking into consideration the size and importance of the project, scientific literature owes the evaluation of its economic impacts yet. This paper seeks to address this need with the exploration of the impact of the new metro line on real estate prices. Design/methodology/approach: To assess the economic effect of the M4 projects on the value of nearby properties, the method of counterfactual impact evaluation was combined with measuring the utility increase with the change of property prices. The research sample covers ten subway stations and more than 25.000 dwellings in five districts of Budapest, the analysis was made for the 2007-2015 period. Findings: When examining the nearby properties at the M4 metro line stations in Budapest, we have found mixed results for the property prices. The new stations exert a positive effect only in those areas which were not connected directly to the existing underground lines Research/practical implications: I is worth to consider using these results when adopting a decision on further directions of transport development in Budapest. Nevertheless there is room for future research focused on the sophistication of distance measurement, the quality of the apartments and the examination of other, especially private development processes besides the metro investment. Originality/value: The paper presents original research in the field of economic effects of the M4 subway project. As it has been shown in the case of the M4 line, several stations have failed to generate additional economic value. This information is most useful for the planning of future transport infrastructure projects.