Wu, Wenjie
(2012)
Empirical essays on real estate, local public goods and
happiness: evidence from Beijing.
PhD thesis, London School of Economics and Political Science.
Abstract
This thesis explores the real estate and happiness consequences of public investment in
local public goods improvements by using unique micro-geographical data from
Beijing; it focuses on the spatial variations in park amenity values, and on the impact of
transport improvements on land prices and homeowners’ happiness. Despite intense
public interest, little is known about these effects. This thesis aims to fill these gaps.
First, I explore the impact and sources of variations of park proximities as
capitalized into the residential land prices. This analysis, using geographically-coded
data from Beijing, provides new insights on the ways in which land markets capitalize
the values of proximity to parks and suggests that this is highly dependent on the
parcel’s location and local contextual characteristics.
Next, I examine the real estate consequence of public investment in transport
improvements using a rich data set of vacant land parcels in Beijing. I use a multiple
intervention difference-in-difference method to document opening and planning effects
of new rail stations on prices for different land uses in affected areas versus unaffected
areas. Residential and commercial land parcels receiving increased station proximity
experience appreciable price premiums, but the relative importance of such benefits
varies greatly over space and local demographics.
Finally, I investigate the impact of transport improvements on happiness that
altered the residence-station distance for some homeowners, but left others unaffected.
My estimation strategy takes advantage of micro happiness surveys conducted
before-and-after the building of new rail stations in 2008 Beijing. I deal with the
potential concern about the endogeneity in sorting effects by focusing on “stayers”and
using non-market housings with pre-determined locations. I find the significantly
heterogeneity in the effects from better rail access on homeowners’ happiness with
respect to different dimensions of residential environment. The welfare analysis results
suggest strong social-spatial differentiations.
In combination, the three papers of this thesis make important contributions to a
growing literature on public infrastructure, land market and happiness.
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