Spatial economic externalities and coordinated land use-transportation planning

Planners often use land price models as tools to support coordinated land use-transportation planning, and as instruments to measure the benefits of land use and transportation improvements, particularly when considering a value capture approach to alternative taxation possibilities. In this paper, we present a land price model characterized by the use of spatial data in a spatial context, by the use of a spatial association parameter and a formal definition of neighborhood that we interpret as elements of an economic externality. Our model analyzes the effects of some usual land use and accessibility variables, and the magnitude of external economies affecting prices using a spatially switching autoregressive model. Using as a case study the city of Sendai in northeastern Japan (pop. about 1 million), we find considerable presence of spatial external economies, and heterogeneous effects of the price determinants between the CBD and the rest of the city.