The South Eastern BRT Network in Brisbane, Australia: How much is added to residential house values as a result of the network effect?

This paper addresses an area of policy much understudied in the literature. It emerged out of investigating the policy needs of governments seeking to find new ways of funding public transport infrastructure. Land rent theory (Alonso, 1964) identifies that the value of unimproved land reflects accessibility gradients with new transport infrastructure, through improvements in accessibility, uplifting land values. Capturing the uplift in land value for funding requires that the amount of uplift be known as well as when the uplift occurs – is this after the announcement of the project, after building starts or when the new infrastructure starts to operate? However, many cities plan a number of projects over a longer timescale, what is the value of the network effect as additional infrastructure provides the opportunity to access more destinations quickly. This network effect is a case of a ‘product’ that has less value in isolation but increases in value when in combination with other ‘products’ (Katz and Shapiro, 1994). There have been a few studies on the timing of uplift (Gatzlaff and Smith, 1993; Knaap et al., 2001), but these have been generally confined to rail based infrastructure in the public transport domain. The objective of this paper is to identify how much is added to residential land values through the provision of bus rapid transit (BRT) in Brisbane, Australia and to identify specifically the value of the network effect as incrementally adding to existing transport infrastructure as a feature of Australian cities. The paper is structured as follows. The next section explores the literature context for this study. This is followed by a description of the data and the case-study area. The method follows which describes the difference in difference methodology employed while the following section interprets the results. The final section discusses the results and concludes with recommendations for future research