Forecasting the Land Value around Commuter Rail Stations using Hedonic Price Modeling

Abstract

The value of land is determined by the relationship between supply and demand in the land market and the land’s location, physical structure, and surrounding area. During infrastructure development, changes in land use and its characteristics are possible and may directly affect the land price significantly. This research aims to generate a prediction model of land market values in response to transportation infrastructure development and elaborates a correlation among factors affecting the land price. A hedonic pricing model is used through multiple linear regression to seek contributing factors affecting the land price. The result shows that the proposed hedonic model can predict the price of land using the model LnLand Price = 16.991 + 0.203 Shape of land + 0.084 Economy of Residents – 0.719 LogStation – 0.405 LogAge. This estimated formula could be used as part of a land value capture mechanism for future development.

Keywords

• Hedonic price modeling
• Land price
• Land value capture
• Railway