Constantine Kontokosta

Marron Institute of Urban Management and
Center for Urban Science and Progress
60 5th Avenue
New York, NY 10011

E-Mail: EmailAddress: hidden: you can email any NBER-related person as first underscore last at nber dot org
Institutional Affiliation: New York University

NBER Working Papers and Publications

February 2020Take the Q Train: Value Capture of Public Infrastructure Projects
with Arpit Gupta, Stijn Van Nieuwerburgh: w26789
Transit infrastructure is a critical asset for economic activity yet costly to build in dense urban environments. We measure the benefit of the Second Avenue Subway extension in New York City by analyzing local real estate prices which capitalize the benefits of transit spillovers. We find that price increase by 10%, creating $7 billion in new property value. Using cell phone ping data, we document substantial reductions in commuting time especially among subway users, offering a plausible mechanism for the price gains. Higher prices reflect both higher rents and lower risk. Infrastructure improvements thus lower the riskiness of real estate investments. Only 30% of the private value created by the subway is captured by local government through higher property tax revenue, and is insuffi...

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