Browsing by Subject "kvasikokeellinen tutkimus"

An increasing number of people move permanently into cities as urbanization continues to shape modern societies. The economic effects of a growing urban structure and increased demand for housing have been widely studied since the middle of the twentieth century. Attention has also been paid to the localized effects of these phenomena within the city structure. One common form of increasing housing supply and residential density is urban infill – the process of constructing buildings into existing city structure instead of creating entirely new areas. Economic research offering support for a denser urban structure and relatively low infrastructure costs are common arguments in favour of infill, while feared neighbourhood disturbances can create opposition. Especially in Finland, urban infill is a relevant and sometimes controversial topic with only a few academic papers focusing on its actual economic effects. In this thesis, the effect that urban infill has on the prices and liquidity of older dwellings that surround it, is estimated in the Helsinki Metropolitan Area (HMA). This contributes to the related literature in urban economics and is done by combining adequate empirical methods with precise housing market data. By conducting a high-quality geocoding procedure with GIS-software, over 19000 pinpointed housing transactions done between 2010 and 2017 are examined in a quasi-experimental setting, where urban infill acts as a form of treatment. In this empirical setting, a hedonic model with a difference-in-differences specification is utilized. Dwellings in the vicinity of an urban infill project are compared to a control group before and after the commencement of infill. The control group is comprised of similar dwellings located sufficiently far from infill, but still within its geographical proximity. A broad set of control variables is used in order to take into account remaining temporal, spatial, and dwelling-specific differences between the two groups. In the primary model specifications of this thesis, a significant positive price premium associated with urban infill is found. Particularly clearly this premium is detected within 300 meters or less from an infill project, occurring already during the marketing and construction phase of the project. The average magnitude of the premium is in the range of a few percent and varies depending on the specification used. No statistically significant liquidity effects were found, and the treatment variables concerning liquidity indicate both positive and negative effects depending on the distance to infill. Results behave as expected in the majority of the several robustness checks that are included in this thesis. These checks show that the detected price premium is strongest in areas surrounding the already densely built inner city, where prominent urban development has taken place during the studied period. The core of the inner city is excluded from the analysis, however, due to a lack of suitable infill projects. Results become increasingly ambiguous, as the analysis moves into less urban areas and the number of observations diminishes. Adding placebo treatments into the model gives an indication that the timing of the treatment is correctly selected in order to estimate the causal effect of urban infill on housing prices and liquidity.