Valuing Incremental Highway Capacity in a Network

47 Pages Posted: 17 May 2010 Last revised: 11 Mar 2023

See all articles by H. Allen Klaiber

H. Allen Klaiber

Ohio State University (OSU) - Department of Agricultural, Environmental & Development Economics

V. Kerry Smith

Arizona State University (ASU) - Economics Department; National Bureau of Economic Research (NBER)

Date Written: May 2010

Abstract

The importance of increments to an existing highway system depends upon their contributions to the accessibility provided by the existing network. Nearly 40 years ago, Mohring [1965] suggested this logic for planning optimal highway investment programs. He argued it could be implemented by measuring the quasi-rents generated by specific additions to an existing roadway system. This paper uses a unique set of additions to a loop roadway in metropolitan Phoenix, together with detailed records of housing sales over the past decade, to meet this need. We find that estimated increases in capitalized housing values due to four segments added during this period range from 73 to over 273 million dollars per mile of the roadway addition.

Suggested Citation

Klaiber, H. Allen and Smith, V. Kerry, Valuing Incremental Highway Capacity in a Network (May 2010). NBER Working Paper No. w15989, Available at SSRN: https://ssrn.com/abstract=1607479

H. Allen Klaiber (Contact Author)

Ohio State University (OSU) - Department of Agricultural, Environmental & Development Economics ( email )

2120 Fyffe Rd
Columbus, OH 43210-1067
United States

V. Kerry Smith

Arizona State University (ASU) - Economics Department ( email )

Tempe, AZ 85287-3806
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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