CHANGING CAPITALIZATION OF CBD-ORIENTED TRANSPORTATION SYSTEMS - EVIDENCE FROM PHILADELPHIA, 1970-1988

This paper presents estimates of how the value of central business district (CBD) accessibility has changed over the period 1970-1988 for the Philadelphia metropolitan area. Using a large data set on suburban Philadelphia house sales, we estimate house value premiums associated with CBD-oriented train service provided by the Southeastern Pennsylvania Transportation Authority for each year in the sample. Additionally, we provide evidence on the changing value of highway access to the CBD. For the Philadelphia metropolitan area, we find strong evidence that accessibility to the CBD is capitalized into suburban house values. The estimated value of CBD accessibility fluctuates with the economic health of the city, indicating that the central city economy is an important factor in the overall wealth of suburban communities. From a policy perspective, these findings suggest that suburban communities may not be able to isolate themselves from the consequences of central city decline, and in fact, that suburban communities may benefit substantially from a growing central city. © 1993 Academic Press. All rights reserved.